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Cryptocurrency: rise of decentralised finance sparks ‘dirty money’ fears

‘Know your customer’ rules for banks and brokers underpin anti-money laundering efforts but are at risk due to DeFi

A few days after the July 4 holiday in the US, a 37-year-old entrepreneur in Denver named Erik Voorhees issued his own declaration of independence. He said the company he had founded seven years earlier to help people exchange cryptocurrencies without making their names available to the government or anyone else would disappear from the face of the Earth — even as its services remained available to those who wanted them.

ShapeShift, as the enterprise is known, would become a “decentralised autonomous organisation”, or DAO, over time, he declared. Its corporate structure would fade away. Control of its open-source software for exchanging cryptocurrencies would “gradually migrate” to holders of ShapeShift’s FOX digital token, which had been distributed to employees, investors and customers. Voorhees will receive the biggest share, a little more than 5 per cent of the maximum total supply, he added.

“ShapeShift’s vision is the establishment of an immutable, borderless financial system,” Voorhees wrote on Twitter, where he has nearly 525,000 followers. “Let’s be direct: money and finance shall not be operated by coercive government among free people. They shall — like language, mathematics, and love — emerge voluntarily and without central rule.”

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