The recent series of compliance measures are, in the long run, a significant positive for decentralized exchanges and on-chain trading.

To put it simply, policies like CARF essentially make centralized exchanges act as intermediaries for tax information reporting. As long as you trade on CEXs, go through fiat channels, and complete KYC verification, tax transparency is inevitable.

But DEXs and on-chain wallets are completely different — there is no single controlling entity, no centralized place storing user data, and therefore no inherent obligation for information reporting. This will directly push a group of high-frequency traders, funds engaged in cross-border asset allocation, and certain arbitrage funds to migrate onto the chain.

Of course, this doesn’t mean on-chain activities can escape regulation forever, but the reality is: the compliance costs for centralized exchanges are rising, and frictions are increasing. In comparison, the appeal of on-chain native finance becomes more evident.

Looking ahead, liquidity structures will definitely continue to tilt toward DeFi and DEXs. This isn’t about preventing disintermediation but accelerating it.