The Financial Action Task Force (FATF), a global anti-money laundering watchdog based in Paris, released draft guidance on Friday that, if adopted, poses an existential threat to the booming DeFi and NFT markets, analysts say. In its new guidance, the FATF defined most operators of decentralized finance (DeFi) platforms as "Virtual Asset Service Providers" (VASPs). That means that, if the guidelines are adopted in the US and other major jurisdictions as proposed, many DeFi platforms will have to find a way to comply with rules around combating financial crimes. But that won't be as easy as it may sound. DeFi, or decentralized finance, is a general term for non-custodial and peer-to-peer financial services. DeFi protocols often use smart contracts (essentially just computer code) to allow money to flow between traders, and they exist primarily on the Ethereum network. In short, these products allow their users to use bank-like services without the need for bank, or any other third-party intermediary. Analysts told Decrypt that FATF's 99-page document is out of tune with the realities of DeFi and, if adopted by governments as it is, could prove fatal for the burgeoning industry. The document also vaguely referred to NFTs that can facilitate money laundering and terrorism financing as "virtual assets," though left room for those that can't be used for such financing to not fall under its guidelines. According to the analysts we spoke with, it's an unhelpful distinction.