Decentralized cryptocurrencies pose a threat to national security, according to the Treasury Department. Regarding the 2023 illicit funding risk assessment, the U.S. Treasury Department: press statement. After a thorough investigation of the decentralized finance industry, the report Learn how cybercriminals, thieves, scammers, and ransomware perpetrators use DeFi services to transfer and launder illegally obtained money.
This is why cryptocurrencies are a national security concern. Reinforcing this Brian E. NelsonThe Secretary of the Treasury, head of the counter-terrorism and financial intelligence agency, said an assessment by the U.S. Department of the Treasury found that illegal actors, including criminals, fraudsters and North Korean cyber attackers, used DeFi services to launder illicit funds. I have revealed that I have discovered that
According to them, a factor that allows bad actors to exploit the crypto space is the failure of DeFi services to comply with AML/CFT and sanctions obligations. “DeFi services that engage in covert activities under the Bank Secrecy Act are subject to AML/CFT obligations, regardless of whether the service currently claims to be decentralized or plans to do so. ‘, said the press statement.
Weak or non-existent AML/CFT controls over DeFi services in some jurisdictions are the cause of frequent and easy attacks on DeFi, alongside poor cybersecurity by DeFi services that enable the theft of funds. .
The Treasury Department clarified their stance, noting that DeFi allows consumers to transact without the need for intermediaries, which they said increases the potential for money laundering. The paper also highlights how assessments and procedures can be implemented to mitigate the dangers associated with DeFi. These steps are intended to “strengthen U.S. AML/CFT regulatory oversight, consider additional guidance for the private sector on AML/CFT obligations for DeFi services, and address AML/CFT regulatory gaps related to DeFi services.” is to evaluate the enhancement of
The survey highlights the need for increased regulatory oversight and suggests additional regulation of DeFi services will be considered by the US government.