The U.S. Treasury Department today released the "2023 DeFi Illegal Finance Risk Assessment," the world's first financial risk assessment conducted on DeFi.
Noting that decentralized finance (DeFi) services are used for illegal transfers, the US Treasury Department said that North Korea, cybercriminals, ransomware attackers, thieves and scammers are turning to DeFi services to transfer and launder their illicit proceeds.
The Treasury Department said in a statement that the attackers exploited vulnerabilities in anti-money laundering procedures in the United States and abroad.
The Treasury also stated that DeFi platforms do not comply with the obligations imposed to prevent money laundering and terrorist financing, thus posing the most important illicit financial risk in the DeFi field.
Brian Nelson, Under Secretary of the Treasury for Terrorism and Financial Intelligence, said in a statement:
“The risk assessments we conduct play a fundamental role in promoting understanding of the illicit financial risk environment and more effectively protecting the integrity of the US financial system.
At this point, our evaluation of DeFi services shows that illegal actors, including criminals, scammers and North Korean cyber actors, use DeFi services in the process of laundering illegal funds.
To see the potential benefits associated with DeFi services, these risks needed to be addressed.
It must comply with and consider AML/CFT regulations and enforcement obligations to prevent illegal actors from misusing DeFi services.”
