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Abstract

Decentralized Finance (DeFi) emerged with the promise of eliminating traditional financial intermediaries and hierarchies, replacing them with trustless, automated, and decentralized systems. However, the reality of DeFi governance shows that disintermediation does not eliminate conflicts of interest or the need for trust. Cryptoenterprises—financial Decentralized Autonomous Organizations (DAOs)—operate without conventional governance structures such as boards of directors or managerial oversight, relying instead on code-based mechanisms. This absence of internal governance frameworks creates fertile ground for misaligned incentives, governance opacity, and unchecked internal controls, ultimately exacerbating conflicts between insiders (cryptopromoters) and investors (cryptoasset holders).

This Article examines the emerging role of cryptogatekeepers: a new category of cryptointermediaries that counterbalances these governance failures. It explores the structural deficiencies of cryptoenterprises, including the absence of internal monitoring mechanisms, and identifies the conflicts. The analysis highlights how cryptopromoters—those in control of DeFi protocols—retain significant decision-making power while obscuring accountability, which leads to agency problems reminiscent of traditional finance, sans regulatory safeguards. By assessing the function of cryptointermediaries as potential de facto governance enforcers, this Article argues that cryptogatekeepers can introduce a layer of oversight that compensates for the current governance void in DeFi. It outlines best practices for mitigating conflicts of interest, enhancing disclosure standards, and improving the monitoring of cryptointermediaries. The Article also considers transnational regulatory approaches to bolster accountability in DeFi by proposing mechanisms such as cryptointermediary registries, mutual recognition of licensed cryptointermediaries, and standardized reporting frameworks.

Ultimately, this Article contends that while DeFi presents an innovative model for financial services, it cannot escape fundamental governance challenges. The rise of cryptogatekeepers suggests that some level of reintermediation is inevitable and necessary to balance decentralization with investor protection and market integrity.

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