Why STONfi Doesn’t Require KYC – Legal and Regulatory Implications

In traditional finance, Know Your Customer (KYC) is everywhere.
Upload your passport, submit a utility bill, wait days to get verified.
Even many crypto platforms now enforce it.
But STONfi is different.
Here’s why it doesn’t require KYC and what that means.

1. Trustless by Design
KYC exists to protect custodians.
Banks, CEXs, and custodial services hold your money, which means regulators require them to know who you are.
STONfi never holds your funds.
Swaps happen peer-to-peer using cryptographic proofs. No custody, no need for identity verification.

2. Legal Positioning
Because STONfi is non-custodial, it falls outside the same legal frameworks that govern centralized entities.
It’s infrastructure, not an intermediary.
This doesn’t mean it’s lawless — it means it’s architected to avoid the need for invasive data collection in the first place.

3. Privacy as a Feature
KYC exposes users to risk — centralized databases full of personal data are prime targets for hacks.
By not requiring KYC, STONfi protects users not just financially but also personally.
Your trades are secured on-chain. Your identity stays with you.

4. Implications for the Future
As regulators catch up with DeFi, protocols like STONfi highlight an important reality:
Security doesn’t come from knowing names and passports, It comes from removing trust points altogether

STONfi’s model may well become the blueprint for how compliant yet privacy-preserving DeFi evolves.