Can the government track DeFi transactions?

Is it possible for the government to monitor and track transactions made through Decentralized Finance (DeFi) platforms? Given the decentralized and peer-to-peer nature of DeFi, how can authorities ensure transparency and compliance with regulations while still preserving the anonymity and privacy that users often seek in these platforms? What challenges do regulators face in trying to track DeFi transactions, and what measures are being taken to address these challenges?