U.S. Treasury Warns DeFi Is Used by North Korea, Scammers to Launder Dirty Money


Decentralized finance (DeFi) services that aren’t compliant with anti-money laundering and terrorist financing rules pose “the most significant current illicit finance risk” in that corner of the crypto sector, according to the U.S. Department of the Treasury’s first analysis of hazards from the technology.


In an expected risk assessment, published Thursday, the Treasury Department said thieves, scammers, ransomware cyber criminals and actors for the Democratic People’s Republic of Korea (DPRK) are using DeFi to launder proceeds from crime.


On the basis of its findings, the department recommends an assessment of “possible enhancements” to U.S. anti-money laundering (AML) requirements and the rules for countering the financing of terrorism (CFT) as they should be applied to DeFi services. It also calls for input from the private sector to inform the next steps.