Polygon Labs Proposes Critical Infrastructure Status for DeFi Protocols

By Amirkha9News

Polygon Proposes New Status For DeFi Protocols

The paper concludes by recommending the implementation of new laws mandating "critical communications transmitters" (CCTs) to adopt enhanced illicit finance risk management practices. These businesses, responsible for transmitting communications related to DeFi transactions, would not fall under the classification of financial institutions according to the Bank Secrecy Act (BSA) but would contribute to meeting financial integrity objectives.

In its commitment to address illicit finance risks, the proposal emphasizes the significance of classifying DeFi systems as critical infrastructure and involving OCCIP in oversight. Polygon's Chief Legal Officer highlights the role of OCCIP in reinforcing cybersecurity frameworks and information-sharing initiatives within the DeFi sector.

The introduction of CCTs as a distinct category recognizes the need to manage illicit finance risks at specific touchpoints in the DeFi transaction flow. Polygon Labs and Arktouros present a comprehensive framework for tackling illicit finance risks in the DeFi sector, aiming to strike a balance between regulatory oversight and the permissionless nature of DeFi.

Related: Polygon's User Base in 2023 Nearly Rivals Ethereum's

As a side note, the native token of Polygon, MATIC, is currently trading at $0.7797, demonstrating relatively stable sideways movement over the past 24 hours. Despite this, MATIC has witnessed a noteworthy surge of over 9% in the last seven days.

Disclaimer. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.