Galaxy Digital Aims to Bridge Institutional Access to DeFi

Galaxy Digital is developing a Know Your Customer (KYC) and Anti-Money Laundering (AML) framework to help institutions safely participate in decentralized finance (DeFi).

The problem with DeFi is that it was built to be permissionless, making it difficult for traditional financial institutions to comply with regulations. Galaxy's research suggests that this friction has led the industry toward hybrid models that blend centralized and decentralized finance.

The Financial Action Task Force (FATF) has published guidance extending traditional due diligence requirements into the DeFi space, creating additional compliance obligations for decentralized protocols.