Cryptocurrencies, blockchain, NFT and new trends

Understanding the U.S. Treasury Probe on DeFi’s Money Laundering Risks

  • The US Treasury cites centralization, money laundering, drug trafficking, and terrorism as risks in DeFi.
  • The report comes after the regulatory climate in the US turned against crypto.
  • It is unclear whether authorities can effectively ban decentralized protocols.

Decentralized Finance (DeFi) has been touted as a game-changer for the financial industry. Supporters call it an accessible, transparent, and decentralized alternative to traditional finance. However, a recent report by the US Treasury sheds a different light on the industry.

In a first-of-its-kind move, the US Department of the Treasury published the 2023 DeFi Illicit Finance Risk Assessment on Friday. The report highlighted the risks associated with DeFi services and urged the industry to take steps to mitigate them.

The report highlighted the potential for DeFi to serve individuals engaging in illicit…

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