Assistant Secretary of the Treasury for Terrorist Financing and Financial Crime Elizabeth Rosenberg reminded the audience at the Atlantic Council think tank on April 21 that the US Treasury Department conducted a risk assessment of decentralized finance (DeFi) and found that the industry in It is ever flawed ways. More regulation, she said.
Rosenberg was referring to a Treasury Department report released in early April that found scammers, money launderers and North Korean hackers benefited from the industry's lack of anti-money laundering (AML) and countering the financing of terrorism (CFT) compliance. The report is part of the Treasury Department's response to US President Joe Biden's executive order on responsible development of digital assets.
The report also found that DeFi was not always very decentralized. “In general, there are people and companies associated with those [DeFi] services for which AML/CFT obligations may already apply,” Rosenberg said. The assessment report determined that all DeFi services are liable to comply with the Bank Secrecy Act, including AML/CFT. “We will assess improvements to the domestic AML/CFT regulatory regime applicable to DeFi services and monitor responsible innovation of AML/CFT and sanctions compliance tools,” Rosenberg said. She continued: “I would like to convey a specific message to the private sector. 'DeFi innovation'should not only happen in the technical and financial fields - there is a huge need and potential for innovation in compliance mechanisms that can help all participants in the digital ecosystem to ensure They always follow the law."
Rosenberg and her team just returned from a meeting of the Financial Action Task Force (FATF) Virtual Assets Liaison Group in Tokyo, she said. The team also presented the results of the Ministry of Finance's DeFi risk assessment there. The timing of Rosenberg's speech is also notable, as the European Parliament passed legislation on crypto asset markets a day earlier. The MiCA legislation includes provisions to track or block certain payments using crypto assets. This AML/CFT practice is already used in traditional finance and is travel dubbed the “ ” by the FATF. It is also a key part of Treasury’s risk assessment.
