US says crooks using DeFi to launder illicit proceeds

North Korea, cybercriminals, ransomware attackers, thieves, and scammers are using DeFi services to transfer and launder their illicit proceeds, according to the US government.

In its first illicit finance risk assessment conducted on decentralised finance, the US Department of the Treasury says bad actors are exploiting the fact that many DeFi services that have anti-money laundering and countering the financing of terrorism (AML/CFT) obligations fail to implement them.

Other issues being exploited by crooks are that some DeFi services are out of scope for existing AML/CFT obligations, weak controls in other countries, and poor cybersecurity controls by providers.

Under Secretary of the Treasury for terrorism and financial intelligence Brian Nelson says: “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.”

Read the full assessment:Download the document now 1.6 mb (Chrome HTML Document)