U.S. Treasury assesses risks of money laundering through DeFi services

U.S. Treasury assesses risks of money laundering through DeFi services

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Author: Robert Strickland (crypto expert)
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U.S. Treasury assesses risks of money laundering through DeFi services
U.S. Treasury Department assessed the risks of laundering illicit proceeds through DeFi services
U.S. Treasury Department urges authorities to tighten regulation of the decentralized finance sector

The U.S. Treasury Department issued a report to assess the risks of illicit financial transactions through DeFi-services. According to the document, criminals are using decentralized financial platforms to launder illegally obtained funds.

However, they insist that DeFi services engage in activities covered by the Bank Secrecy Act and must comply with AML/CFT requirements, regardless of whether they are decentralized or not.

The use of public blockchain data and the development of new industry solutions can help mitigate some of the risks of illicit financing, the department says. Nevertheless, the Ministry of Finance points out that these tools cannot replace the application of AML/CFT controls by financial regulators.

The ministry recommends strengthening regulatory oversight and encourages private companies to develop their own tools to reduce the risk of violations by DeFi-services and abuse of their services.

At the same time, the authors of the document acknowledged that the volume of offenses in the field of DeFi remains small compared to the area of traditional finance.

"Illegal activity is only part of DeFi activity, which in turn has a small share in the overall ecosystem of virtual assets.

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