The US Treasury Department announced its intention to strengthen regulation of the DeFi sector


The US Treasury Department has announced its intention to strengthen regulation of the decentralised finance (DeFi) sector following a risk assessment. The agency will assess whether anti-money laundering and counter-terrorist financing (AML/CFT) rules apply to the DeFi sector and will also monitor the implementation of new compliance tools and sanctions. Elizabeth Rosenberg, Assistant Secretary of the U.S. Treasury, made the announcement on April 21 at the Atlantic Council meeting.

It referred to a report dated April 6 that showed how fraudsters and North Korean hackers were taking advantage of DeFi's failure to comply with AML/CFT regulations. The report was part of the Treasury Department's response to President Joe Biden's executive order on responsible management of digital assets.

The analysis showed that the DeFi sector "is not fully decentralised". Rosenberg noted that some individuals or companies involved in such services may already be under AML/CFT regulation. In addition, the report found that all DeFi offerings must comply with the Bank Secrecy Act.

Addressing private firms, she said that "innovation must take place in both the technological and compliance aspects of DeFi to ensure compliance.

On April 20, the European Parliament approved the Crypto Asset Markets Act (MICA), which includes provisions to monitor and discourage transactions involving digital assets.

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