NEAR Protocol co-founder Illia Polosukhin said the crypto industry faces a choice between maturing and being pushed to the margins under regulation that is not designed for it. In a post cited by BlockBeats on Sept. 29, he argued that claims that decentralized systems cannot take action are inaccurate, saying decentralization does not mean a lack of organization. Polosukhin contrasted crypto with banks, which use AI to detect fraud but operate through highly centralized systems and depend on KYC. In his view, KYC has not addressed the real problem. He said the crypto sector has stronger data resources and talent, making it possible to build systems that do not rely on KYC while still curbing criminal activity and protecting the freedom of legitimate users. He also said industry-wide coordination could gradually remove criminal activity from the crypto sector, and argued that the market tied to such activity is much smaller than the market tied to moving broader economic activity on-chain.
NEAR Protocol co-founder Illia Polosukhin said the crypto industry is facing a decision: it can either become more mature or risk being marginalized under regulation that lacks proper targeting, according to BlockBeats on Sept. 29.
Polosukhin said it is not accurate to claim that decentralized systems are unable to act, writing that 「decentralization does not mean disorganization」.
He said banks use AI to identify fraud, but their systems are highly centralized and depend on KYC, while KYC itself has not solved the real problem. By contrast, he said the crypto industry has richer data and deeper talent pools, which could support systems that do not rely on KYC while still effectively curbing criminal activity and preserving the freedom of legitimate users.
Polosukhin added that coordinated industry action could gradually remove criminal activity from crypto. He also said the market size tied to crime is far smaller than the market tied to bringing broader economic activity on-chain.
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