US regulator to seek feedback on DeFi's impact on financial crime

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A “close look” is being taken astatine wealth laundering and panic financing laws by FinCEN arsenic it asked banking assemblage players for feedback connected DeFi’s transgression risks.

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A United States fiscal regulator is looking to summation feedback from the banking manufacture astir however decentralized concern (DeFi) whitethorn impact the bureau's efforts to halt fiscal crime.

The Financial Crimes Enforcement Network (FinCEN) said it is “looking carefully” astatine DeFi, portion the agency’s acting director, Himamauli Das, said the digital plus ecosystem and virtual currencies are a “key precedence area” for the agency.

Das gave prepared remarks connected Dec. 6 astatine the American Bankers Association’s Financial Crimes Enforcement Conference.

The acting manager added the bureau is “taking a adjacent look” astatine its Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) model for cryptocurrencies and integer assets to determine if “additional regulations oregon guidance are necessary.”

“We are engaging with applicable U.S. authorities stakeholders successful this effort,” said Das. “We invited engagement with manufacture — including the banking assemblage — to amended recognize your appraisal of the vulnerabilities and risks.”

In particular, the regulator was acrophobic astatine DeFi’s “potential to trim oregon destruct the relation of fiscal intermediaries” that are captious to its AML and CFT efforts.

Das said it recognizes DeFi “will proceed to interaction the fiscal services industry” and the bureau volition request to mitigate the “illicit concern and nationalist information risks posed by the misuse of integer assets.”

Related: Terrorists inactive predominantly usage currency implicit crypto: UN officials

FinCEN’s valuation of its AML and CFT frameworks is part of the Executive Order connected Ensuring Responsible Development of Digital Assets issued by United States President Joe Biden connected Mar. 9.

A effect of the Executive Order was the U.S. Treasury Department’s “Action Plan to Address Illicit Financing Risks of Digital Assets.”

Among other precedence actions, the program recommended accrued backstage assemblage engagement done “the work of authoritative documents, discussions, and Treasury programs that alteration public‐private and private‐private accusation sharing.”

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