According to Cointelegraph, a new hook on the Uniswap V4 open source directory has sparked controversy in the crypto community. The hook requires users to perform a Know Your Customer (KYC) check before trading in the trading pool. An X (former Twitter) user criticized the hook, arguing that it creates the possibility for decentralized financial protocols to be whitelisted by regulators. In Uniswap V4, this hook will allow developers to use KYC verification in decentralized financial protocols. Financial institutions use KYC procedures to verify customer identities and assess related risks. The main goal of KYC is to detect money laundering and terrorist financing activities. The KYC hook code is available on GitHub. This KYC hook was added to the Uniswap V4 directory by a community developer as an optional feature. KYC verification is done by a non-fungible token (NFT). Another X user said that this hook is aimed at liquidity providers and may be useful for projects that must comply with regulatory requirements in certain jurisdictions. Governments around the world are paying close attention to DeFi protocols and transactions. Recently, the G20 accepted the crypto regulatory roadmap proposed by the International Monetary Fund (IMF) and the Financial Stability Board (FSB) to strengthen crypto regulation. Uniswap V4 introduces customizable hooks and is expected to go live in early 2024, with access limited to entities with governance approval.