US Treasury Department To Release Risk Assessment on Criminal Use of Decentralized Finance (DeFi)

03/15/2023 21:41 • AI & Tech Insights • 69 views

It is reported that Elizabeth Rosenberg, the assistant secretary in charge of terrorist financing and financial crimes, said that the US Treasury Department will soon release a risk assessment to analyze the criminal use of decentralized finance (DeFi). Rosenberg said at the bank event held in Sydney, Australia on Monday that “illegal actors have been looking for effective ways to hide criminal activities and launder their profits, which poses a threat to the DeFi service or other elements of the virtual asset ecosystem.” She said that her team is “actively carrying out” an upcoming assessment.

The US Treasury Department is about to release a report on the use of DeFi crime

Analysis based on this information:

The US Treasury department is reportedly preparing to release a risk assessment that reviews criminal use of Decentralized Finance (DeFi). Elizabeth Rosenberg, the assistant secretary who is in charge of terrorist financing and financial crimes, raised concerns regarding the illegal use of DeFi. She said that some bad actors have been seeking effective ways of hiding their criminal activities and laundering their profits, which could pose a significant threat to the DeFi service or other elements of the virtual asset ecosystem.

Decentralized finance is a financial system built on blockchain technology, enabling users to create or take part in digital financial ecosystems without intermediaries like banks or governments. The system’s use has increased significantly in recent times, with the value of DeFi services surging to about $40 billion. However, marked rises in DeFi adoption rates, market value, and complexity have been accompanied by an intensification of the criminal use of the system.

Rosenberg further added that the Treasury Department is actively carrying out the upcoming risk assessment to help identify key risks to the security of DeFi services and the virtual asset space. They aim to ensure that virtual asset service providers (VASPs) comply with anti-money laundering regulations and know-your-customer protocols fully. The result could be increased regulation of this fast-expanding field, while many will see the assessment as a crucial step in channelling DeFi’s exponential growth hopes that the regulatory intervention won’t be too burdensome.

The report suggests that the DeFi service or virtual asset sector must incorporate adequate security measures to protect against financial crime risks like fraud or money laundering. Additionally, cryptocurrency exchanges and virtual asset trading platforms should strictly follow anti-money laundering protocols to avoid regulatory penalties.

In conclusion, the Treasury department’s risk assessment on the criminal use of DeFi should help in identifying security vulnerabilities and promoting better compliance, which is desperately needed as the virtual asset sector expands. It will undoubtedly provide industry players with an excellent opportunity for self-reflection, developing regulatory-compliant services and products and improving customer experiences.

This article and pictures are from the Internet and do not represent qiAiAi's position. If you infringe, please contact us to delete:https://www.qiaiai.com/ai/7205.html

It is strongly recommended that you study, review, analyze and verify the content independently, use the relevant data and content carefully, and bear all risks arising therefrom.