The US Treasury Department said Thursday that cybercriminals and ransomware attackers are using decentralized finance (DeFi) services to transfer and launder their illicit proceeds.
Such actors are able to exploit vulnerabilities since many DeFi services that have anti-money laundering and countering the financing of terrorism obligations fail to implement them, the department said in a statement after publishing its 2023 DeFi Illicit Finance Risk Assessment.
"Risk assessments play a foundational role in promoting understanding of the illicit finance risk environment and more effectively protecting the integrity of the U.S. financial system," said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian Nelson.
"Our assessment finds that illicit actors, including criminals, scammers, and North Korean cyber actors are using DeFi services in the process of laundering illicit funds," he added.
The official also advised private sector to use the findings of Treasury's assessment to inform their own risk mitigation strategies to prevent illicit actors from abusing DeFi services.
Becoming a popular concept in recent years, DeFi includes financial instruments without using traditional intermediaries such as banks, exchanges and brokerages.
They can offer alternative payment systems by using blockchain, smart contracts and cryptocurrencies.
Source: Anadolu Agency