BNN Bloomberg | , | Apr 6, 2023
Decentralized financial transactions, including those done with virtual currencies, need to comply with anti-money laundering and sanctions laws, the US Treasury Department said in a new report.
- The 39-page report, which was commissioned by the Biden administration, concludes there are several risks associated with DeFi technology, which has no exact definition but includes self-executing transactions between two or more people based on the same blockchain technology that underpins cryptocurrencies.
- As various countries, including the US, deliberate on how to regulate cryptocurrencies and virtual assets, a report has surfaced advocating for more stringent rules around the technology. The report also emphasizes that firms and individuals must adhere to the already-established laws regarding money laundering and terrorist financing. According to the report, many institutions and users are currently not following existing regulations.
- The report’s findings, which recommend some changes to the law, come as the Biden administration is considering a broader regulatory framework for cryptocurrencies and other forms of payment conducted with blockchain technology. The administration in September called on the Securities and Exchange Commission and other regulators to “aggressively pursue investigations and enforcement actions against unlawful practices.”
See:
Linklaters: Crypto and DeFi: Understanding the Risk Landscape and Tackling the Shifting Outlook
Bank of Canada Paper: Fragility of DeFi Lending
Brian Nelson, the Treasury undersecretary for Terrorism and Financial Intelligence:
Capturing the potential benefits associated with DeFi services requires addressing these risks. The private sector should use the findings of this assessment to inform their own risk mitigation strategies and to take clear steps, in line with AML/CFT regulations and sanctions obligations, to prevent illicit actors from abusing DeFi services.
Continue to the full article –> here
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- Source: https://ncfacanada.org/us-treasury-demands-defi-adhere-to-anti-money-laundering-rules/
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