According to Patrick McCorry, there is still no definitive regulatory guidance on whether crypto front-ends or user interfaces will be required to perform Know Your Customer (KYC) checks on users transacting through their platforms. McCorry argues that requiring KYC at the UI level is unreasonable since front-ends primarily facilitate the creation of transaction payloads. This ongoing uncertainty may impact trading operations and compliance strategies for decentralized exchanges and other Web3 projects, potentially influencing user onboarding flows and market liquidity (source: Patrick McCorry).

According to GoChapaa (@GoChapaa), the leading fear among crypto wallet users centers on security breaches and loss of access, which can lead to significant asset loss and trading disruption (source: GoChapaa Twitter, May 8, 2025). As more traders enter the Web3 space, concerns about private key mismanagement, phishing attacks, and wallet hacks have escalated, resulting in increased anxiety and cautious trading behavior across crypto markets. These user fears directly impact trading volumes and liquidity, as traders may hesitate to move assets or engage in high-frequency trading. Enhanced wallet security features and user education are becoming key differentiators in wallet adoption and can influence market sentiment, especially during volatile periods.