DEXs and KYC: A match made in hell or a real possibility?

cointelegraph.com:

In his monthly crypto tech column, Israeli serial entrepreneur Ariel Shapira covers emerging technologies within the crypto, decentralized finance and blockchain space, as well as their roles in shaping the economy of the 21st century.

The White House came out with an executive order on regulating crypto recently. Across the sea, European legislators defeated a legislative push that could have spelled major trouble for proof-of-work networks. These developments should be ringing a bell that most crypto aficionados have long grown used to: Regulation is still very much on the agenda, and even though the blockchain community is now way more welcoming to compliance than it once was, this cannot go without at least a few ruffled feathers.

One of the things that will inevitably come up on the regulators’ target lists is Know Your Customer (KYC) protocols. As far as today’s ecosystem goes, these protocols are pretty much all over the place. Some platforms, usually the more centralized ones, handle KYC more or less the same way a traditional financial institution would, including at least an ID check-up. Others, however, work pretty much on a plug-and-play basis, meaning that as long as you have a crypto wallet, you are in business.

Related: European ‘MiCA’ regulation on digital assets: Where do we stand?

Decentralized exchanges, or DEXs, are pretty much the poster children for the latter approach. When using one, such as PancakeSwap on BNB Smart Chain or WingRiders on Cardano, you interact with the smart contracts powering their liquidity pools. In most cases, anyone can stake their tokens into the pool to earn a share from its accumulated transaction fees, and anyone can tap the pool to swap their tokens without much in terms of