Treasury Reiterates AML/CFT DeFi Concerns

Following on the President’s executive order (see Client Report CRYPTO26) and its own reports (see FSM Report CRYPTO30), Treasury today released its DeFi Risk Assessment, finding as prior reports have presaged that AML/CFT noncompliance is the sector’s primary vulnerability.  Indeed, the analysis strongly states that firms must comply with these standards no matter their business model.  It also highlights a regulatory gap where DeFi firms not classified as financial institutions under the BSA are exempt from stringent standards, suggesting both statutory and regulatory changes.