A financial system regulator in the United States has sought feedback from commercial banks to understand how decentralized finance (DeFi) harms our unremitting efforts to dissuade financial crimes.
FinCEN shows that it has "carefully analyzed" DeFi, but Himamauli Das, the agency's acting director, said that the digital asset ecosystem and digital currency are the "important priority industries" of the institution.
Das delivered a prepared speech at the Financial Crime Inspection Meeting of the American Institute of Financiers on December 6.
The Acting Director added that the agency had "carefully considered" its compliance management (AML) and counter-terrorism support (CFT) architecture for digital currency and digital assets to decide whether "additional policies, regulations or specific guidance are necessary"
"We are in touch with relevant stakeholders in the US government," Das said. "We warmly welcome the industry - including the banking sector - to participate in order to better understand your assessment of vulnerability and risk."
In particular, the regulatory authority expressed concern that DeFi "is likely to or reduce the effectiveness of clearing financing intermediaries", which will be particularly important for its compliance management and anti-terrorism financing work.
Das said that it realized that DeFi "will continue to endanger the financial industry" and that the institution must mitigate "the hidden dangers of illegal finance and national security caused by misuse of digital assets"
FinCEN's assessment of AML and CFT structures is a part of the Administrative Regulations on Ensuring Responsible R&D of Digital Assets issued by US President Joe Ban Ki moon on March 9.
The result of this administrative regulation is the "Plan for Dealing with the Risks of Illegal Financing of Digital Assets" of the US National Treasury Department
In other priority practices, this plan proposes to promote stakeholder participation according to "publish government documents, thoughts and financial plans, and promote public and private resource sharing"
Related information
Related News
SEC seeks to keep Hinman documents hidden in Ripple case
SEC’s request to seal documents in the Ripple Labs case has sparked criticism from the community.
FTX asks bankruptcy judge to stop BlockFi from claiming Robinhood shares
The 56 million Robinhood Markets shares at stake are currently worth around $450 million.
Crypto Twitter confused by SBF’s $250M bail and a return to luxury
The crypto community raised many questions about how FTX’s former CEO was able to secure bail and the conditions it will come with.
SBF reportedly files new bail application in the Bahamas Supreme Court
Bahamas media reports that Sam Bankman-Fried lodged a new bid for bail just two days after a judge denied his previous application, calling the FTX founder a flight risk.