(Reporting by Daphne Psaledakis and Chris Prentice; Editing by Conor Humphries)
WASHINGTON, April 6 (Reuters) - North Korea,
cybercriminals, ransomware attackers, thieves and scammers are
using decentralized finance (DeFi) services to transfer and
launder their illicit proceeds, the U.S. Treasury Department
warned on Thursday.
So-called DeFi platforms allow users to lend, borrow and
save, usually in cryptoassets and stablecoins, without using
banks.
In a new illicit finance risk assessment on decentralized
finance, the Treasury found that illicit actors are exploiting
vulnerabilities in U.S. and foreign anti-money laundering and
combating the financing of terrorism (AML/CFT) regulation and
enforcement as well the technology underpinning the services.
DeFi services that fail to comply with these obligations to
prevent money laundering and terrorism financing pose the most
significant illicit finance risk in this domain, the assessment
found.
"Our assessment finds that illicit actors, including
criminals, scammers, and North Korean cyber actors are using
DeFi services in the process of laundering illicit funds," the
Treasury's Under Secretary for Terrorism and Financial
Intelligence, Brian Nelson, said in the statement.
Nelson added that the private sector should use the findings
of the assessment to inform their risk mitigation strategies and
to take steps to prevent illicit actors from using decentralized
finance services.
Other vulnerabilities found in the assessment included the
potential for DeFi services to be out of scope for existing
AML/CFT obligations, the lack of implementation of international
AML/CFT standards and poor cybersecurity practices.
The assessment recommended strengthening U.S. AML/CFT
supervision, considering additional guidance for the private
sector on DeFi obligations and addressing any regulatory gaps
related to the services.
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