ID requirements on Decentralised Exchanges varies from a passport snap to supplying a third party photometric match and the technology is developing.
Transactions from fiat currency to coin tokens and vice versa which are the entry/exit points to conventional banking are apparently of initial interest to regulators. The volume and number of movements will be flagged up by further controls as the Blockchain develops.
As transactions are based on a long code of numbers and all transactions are logged at multiple points, the blockchain can be monitored if participants are willing
DeFi and DEXs are only a decade old at most and they will develop both in user and in use as new tokenisation options take hold bring new financial products such as DeFi Mortgages.
New instruments such as DeFi mortgage derivatives will arrive but whatever theri complexity, the regulators mainly want to know the users identity and if the products are fraudulent or not.
AML will have greater demand as new DeFi products develop..