1inch’s CLO Orest Gavryliak: "Just give us rules"

Recently, 1inch’s Chief Legal Officer Orest Gavryliak joined Cointelegraph’s Chain Reactions to discuss the situation around Clarity Act.

For years, the crypto industry has faced the same problem: innovation moved fast while regulation struggled to keep up. The result? A patchwork of rules, legal uncertainty and, in the US, regulation by enforcement.

That may finally be changing. In a recent episode of Cointelegraph's Chain Reaction, 1inch Chief Legal Officer Orest Gavryliak explained why the US Clarity Act could become a watershed moment not only for DeFi, but for the entire digital asset industry. If passed, the legislation would establish the first comprehensive regulatory framework for crypto, including decentralized, non-custodial protocols that have long operated without clear legal guidance.

Moving beyond regulation by enforcement

According to Orest, the industry's biggest challenge has never been regulation itself. It has been the absence of clear rules.

"Just give us rules," he said, describing the uncertainty that DeFi builders have faced for years. Without established playbooks, projects have been forced to navigate legal gray areas while trying to innovate responsibly.

The Clarity Act aims to change that by replacing enforcement-driven oversight with a defined legislative framework covering crypto, DeFi and decentralized protocols. Unlike existing regulations that largely focus on custodial businesses such as exchanges and stablecoin issuers, the proposed law recognizes that non-custodial protocols operate fundamentally differently.

Why DeFi needs its own framework

One of the biggest shortcomings of previous regulatory efforts is that decentralized protocols simply do not fit into traditional financial categories.

For years, regulators have attempted to apply rules designed for custodians and financial intermediaries to protocols that never take custody of user assets. Orest argues that this mismatch has been the root cause of much of the industry's legal uncertainty.

Instead of forcing DeFi into legacy frameworks, the Clarity Act creates dedicated regulatory "boxes" for decentralized technologies and non-custodial services. That distinction could give developers and businesses the certainty they need to continue building.

Building ahead of the rules

Orest noted that 1inch has actively participated in discussions with policymakers and industry working groups while sharing the company's approach to compliance and risk management.

According to him, 1inch has been building its risk management and compliance infrastructure in the same direction the Clarity Act is heading, including through publicly documented risk management frameworks. While the text is still evolving through the legislative process, he believes this proactive approach positions the company well as the final framework takes shape.

Compliance without compromising decentralization

One topic that continues to generate debate is KYC requirements for DeFi.

Orest argued that blockchain-native risk management can often provide stronger protection than traditional identity verification alone. Modern DeFi platforms can combine onchain analytics, machine learning, wallet risk assessment, behavioral analysis and law enforcement cooperation to identify malicious actors.

At the same time, he emphasized that 1inch is prepared to comply with whatever framework lawmakers ultimately adopt.

"If you're putting that inside the rulebook, we're OK to implement and obey," he said.

Protecting open-source development

The interview also touched the wider debate about legal exposure for open-source software developers.

Orest stressed that developers should not face liability simply for publishing open-source code. Regulatory obligations, he argued, should reflect the degree of control a person actually exercises over user assets and transactions, rather than the act of writing and releasing code.

That distinction is particularly important for projects like 1inch, which develop open-source infrastructure while also operating user-facing products. Clear legal standards would help define where protocol development ends and business responsibilities begin.

A global impact

The significance of the Clarity Act extends far beyond the United States. Orest believes the legislation could go beyond Europe's MiCA framework by covering a much broader range of crypto businesses, including DeFi and emerging technologies such as AI-powered financial services. Rather than regulating only centralized players, the Act seeks to provide legal certainty across the entire crypto ecosystem. If successful, the framework could become a model for regulators worldwide.

One financial system

For Orest, the long-term vision goes well beyond regulation. He believes clear rules could accelerate the convergence of traditional finance, centralized finance and DeFi into a single financial ecosystem built on modern infrastructure.

"We need new rails," he said. "I really believe that Clarity will make CeFi, TradFi and DeFi be one thing, which is the new finance."  

Disclaimer: This article summarizes views shared during a public discussion of pending legislation. It reflects personal policy perspectives, does not constitute legal advice, and the Clarity Act remains subject to change as it moves through the legislative process.

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