U.S. Treasury: Considering additional guidance on AML/CFT obligations for the private sector regarding DeFi services

ChainCatcher News, the U.S. Department of the Treasury today released the 2023 DeFi Illicit Finance Risk Assessment, stating that decentralized finance (DeFi) transactions, including financial transactions conducted with virtual currencies, must comply with anti-money laundering and sanctions laws. The report highlights several risks associated with decentralized financial technologies, including the abuse by ransomware cybercriminals, thieves, scammers, and other online participants. It also poses challenges to national security and consumer protection.

As this report is released, the U.S. and other countries are working to address how to regulate cryptocurrencies and virtual assets. The report recommends implementing stricter regulations on the technology and advises businesses to comply with existing laws regarding money laundering and counter-terrorism financing. Treasury officials stated that to realize the potential benefits associated with decentralized financial services, these risks must be addressed. The private sector should use the findings of this assessment to inform their risk mitigation strategies and take clear steps in accordance with anti-money laundering/counter-terrorism financing regulations and sanctions obligations to prevent illicit actors from abusing DeFi services. (Source link)