How can a DEX pool check who is allowed to trade?

In Uniswap v4 a pool can have a hook attached: a separate smart contract that the pool calls before a swap and before a liquidity change. The hook can check an address against an allowlist and reject the operation if the address is missing. SMBC Nikko's project is built on this. On October 2, 2026 the Japanese broker signed an MOU for a venue on Uniswap where the pool's code enforces AML and CFT requirements.

What did SMBC Nikko and its partners announce?#

According to Crypto Briefing, the memorandum of understanding was signed by SMBC Nikko Securities and Nethermind together with Uniswap Labs, Base and Nyx Foundation. SMBC Nikko handles regulatory engagement and compliance, Nethermind handles development and smart contract security, and Uniswap Labs provides the protocol and the hook architecture. The venue will run on Base.

The launch is targeted for mid-2027. The venue is meant for eligible Japanese investors. The assets to be traded have not been named. SMBC Nikko and Nethermind say they will give regular updates to Japan's Financial Services Agency (FSA). The broker set up its DeFi Technology Department in February 2026. The Defiant reports on the same project.

How does the hook check a participant?#

Identity is checked off chain. The broker runs its usual KYC process and then adds the client's address to an allowlist or issues an attestation that can be verified on chain. When a swap arrives from that address, the pool calls the hook, and the hook looks the address up and either lets the operation through or rejects it.

The hook knows nothing about the person. It sees an address and its status. The detailed design of SMBC Nikko's hooks has not been published. What is known is that they are meant to embed anti-money laundering (AML) and counter-financing of terrorism (CFT) checks.

How is such a pool different from an open one?#

A standard Uniswap pool is open to any address: anyone can add liquidity or swap tokens. In a permissioned pool both traders and liquidity providers have to be on the list. The pool's liquidity is separate from open pools, and its depth depends on how many participants are admitted.

There is also a technical detail. The pool passes the hook the address of the contract that called it, and that is usually a router. Checking the end client takes extra logic that carries the client's address through to the hook.

What are the limits and risks of a permissioned pool?#

• An MOU is a statement of intent. "Mid-2027" is a target, and the FSA has not approved the venue yet.
• Whoever maintains the list can remove an address. Depending on how the hook is built, that can close the holder's exit from a position through this pool.
• A hook is extra code with its own bugs. How hooks change a pool's behavior is covered in the article on effective liquidity in Uniswap v4.
• Checking an address is not the same as checking a person: the key to an allowlisted address can be handed to someone else.
• In a pool with few participants the same trade moves the price more.