The US Treasury conducted an assessment of risks associated with decentralized finance (DeFi) and presented their results at the Atlantic Council think tank, on April 21.With these results, the US Treasury has it clear that scammers, money launderers and North Korean cyber hackers have been taking advantage of the lack of Anti-Money Laundering(AML) and Counter Financing of Terrorism (CFT) compliance present in most DeFi services. The US Treasury's responses were provoked by President Joe Biden's executive order on the responsible development of digital assets. According to the risk assessment conducted by the Treasury, all DeFi services must comply with Bank Secrecy Act, including AML/CFT.

To push this message further, Liz Rosenberg and Brian Nelson will embark on a tour that includes stops in Switzerland, Italy, and Germany to urge institutions to cease any and all trading with Russia. Elizabeth Rosenberg also noted that the Treasury will be assessing enhancements to the existing domestic AML/CFT regulations with regards to DeFi services and monitoring the use of sanctions compliance tools.

The day prior to Elizabeth Rosenberg's presentation, the European Parliament had passed the Markets in Crypto-Assets Act (MiCA) that would be integrating tracing and blocking of payments through crypto currencies that is already utilized in traditional forms of finance. These practices, also known as the "travel rule" in the FATF, were a considerable part of the Treasury's risk assessment and evaluation.

The US enforcement agencies are intensifying their efforts to reduce Crypto-related crime. With the new regulations and the tightening grip of US enforcement agencies, the crypto services must adhere to the compliance measures to diminish the risk of criminal exploitation.



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