The burgeoning decentralized cryptocurrency market threatens U.S. national security and needs greater oversight and enforcement against money-laundering, the U.S. Treasury Department said on Thursday. The warning, in a new Treasury report assessing the risk of the so-called DeFi markets, lays the foundation for tougher regulations and punitive action by federal agencies. DeFi platforms enable crypto investors to transact with each other through software running online, without a central intermediary overseeing transactions. Without the intermediaries of traditional finance such as banks, regulators currently have little insight into DeFi transactions. Ransomware hackers, rogue states and other national security threats have seized upon the market’s opaqueness to move money around the world without detection, facilitating the financing critical to their operations, the Treasury Department report said. “Illicit actors, including criminals, scammers, and North Korean cyber actors are using DeFi services in the process of laundering illicit funds,” said Brian Nelson, Treasury’s undersecretary for terrorism and financial intelligence. “Capturing the potential benefits associated with DeFi services requires addressing these risks.” The report sketches out how the Treasury Department plans to bring the market under greater federal oversight, suggesting that platforms that fail to establish sufficient vetting policies risk enforcement action.
Full report : Decentralized Cryptocurrency Markets Threaten U.S. Security, Treasury Says.
