Commodity Futures Trading Commission (CFTC) chairman Rostin Behnam stressed that decentralised finance (DeFi) must comply with US authorities.
He warned that any projects that provide services to customers in the US and violate local laws would be prosecuted by US authorities.
There is still confusion about who should have regulatory oversight over digital assets, as tokens can take on different characteristics when traded on different markets - for example, when exchanged on a decentralised platform they become a commodity, the CFTC head said.
The US Treasury Department's Office of Foreign Assets Control imposed sanctions on the decentralised cryptocurrency mixer Tornado Cash in August 2022. According to the regulator, the mixer was used by North Korean criminals to launder more than $7 billion over a three-year period.
On August 12, the Netherlands Financial Crime Authority, also known as the Fiscal Information and Investigation Service, detained Alexey Pertsev, the creator of Tornado Cash, in connection with his involvement in concealing illegal financial flows and facilitating money laundering. Police in the Netherlands have not yet identified which specific laws Pertsev violated that led to his arrest. No charges have been brought against the creator of Tornado Cash at this time.
Coin Center, a non-profit organisation in Washington filed a lawsuit against the US Department of the Treasury. Coin Center claims that the sanctions imposed on the mixer violate the constitutional rights of US citizens. Janet Yellen, the US Treasury secretary, and Andrea Gaki, director of the Office of Foreign Assets Control, are named as defendants in the lawsuit.
