Is it just me or is the Treasury Department firing warning shots at DeFi?
by Elizabeth Lopatto from The Verge - All Posts on (#6AJCG)
Who could have guessed? | Illustration: Micha Huigen / The Verge All kinds of unwanted users - ransomware gangs, thieves, scammers, and North Korea - are merrily transacting in decentralized finance and even laundering funds, according to a new report from the Treasury Department. That's because DeFi doesn't comply with anti-money laundering and anti-terrorism finance laws.
Poor compliance with anti-money laundering as well as poor cybersecurity puts DeFi users at risk of theft and fraud, the Treasury says.
In the US, the Bank Secrecy Act - and some other regulations - mean that financial institutions have to help the government detect money laundering. In this paper, the Treasury notes that a DeFi service might well be a financial institution under the BSA, even if it's decentralized, and will have...