Governments can track Decentralized Autonomous Organizations (DAOs) and try to impose restrictions on them under the pretext of laundering money or running illegal activities. I expect soon to see some DeFi talking about new standards, which may include KYC.
yep pretty much the jist of it if your offering a service(business) that facilitates currency movement, you'll need to register as a money business/vasp.. which then entails things like prevent transfers of sanctioned/blacklisted funds, kyc and audits and reporting of suspect behaviour of customers