The US Department of the Treasury recently released a report that shed light on the DeFi risk assessment carried out by its agency.
According to the report, such services do not comply with the necessary regulations and laws that govern traditional finance systems.
Analysts from the agency pointed out that decentralized finance projects rarely meet anti-money laundering and counter-terrorist financing regulations, which makes it an attractive business for criminals, including hackers from North Korea, who launder illegally obtained funds.
Deputy Secretary of the Treasury Brian Nelson, who oversees financial intelligence, urged the corporate sector to use the risks identified in the report to change their procedures to combat money laundering and terrorist financing.
The report also revealed that many DeFi projects intentionally refuse to comply with AML and CFT procedures, as it contradicts the main goal of decentralized finance.
The report included recommendations for US federal authorities to strengthen the regulation of the DeFi industry and provide additional instructions for private companies to work with such projects.
On March 22, the US Commodity Futures Trading Commission (CFTC) also discussed the situation and challenges in the DeFi space.