The US Treasury Department announced on Thursday (April 6th) that cybercriminals and fraudsters are using decentralized finance (DeFi) services to transfer and launder their illegal proceeds.
The Treasury Department has found that illegal actors are exploiting vulnerabilities in US and foreign money laundering prevention and combating terrorism financing (AML/CFT) regulation, as well as the technology that underpins the services. According to the statements, DeFi services that do not comply with these obligations to prevent money laundering and terrorist financing constitute the most important illegal financial risk in this field.
Treasury Recommends Addressing Legislative Gaps
Brian Nelson, Assistant Secretary of the Treasury for Terrorism and Financial Intelligence, said: “Our assessment reveals that many illegal actors, including criminals, scammers, and North Korean cyber actors, are using DeFi services to launder illegal funds.” used the phrases.
Nelson added that steps should be taken to inform the private sector’s risk reduction strategies and prevent illegal actors from using decentralized financial services.
Other vulnerabilities identified in the assessment included the potential for DeFi services to fall outside of current AML/CFT obligations, failure to enforce international AML/CFT standards, and poor cybersecurity practices.
The Treasury’s review recommended strengthening US AML/CFT oversight, providing additional guidance to the private sector on DeFi obligations, and addressing regulatory gaps regarding services.
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