We are pleased to offer the latest episode in Ballard Spahr’s Consumer Finance Monitor podcast series, A Look at the Treasury Department’s April 2023 Report on Decentralized Finance or “DeFi.”
In this episode, we follow up and expand upon our blog post regarding the U.S. Department of the Treasury’s April 6, 2023 report examining vulnerabilities in decentralized finance (“DeFi”), including potential gaps in the United States’ anti-money laundering (“AML”) and countering the financing of terrorism (“CFT”) regulatory, supervisory, and enforcement regimes for DeFi.
In the podcast, we discuss how Treasury tries to define DeFi, the report’s findings regarding the use of DeFi services in transferring and laundering illicit proceeds, the BSA’s potential application to DeFi services, and the report’s recommendations. We then discuss state efforts to regulate digital assets and federal enforcement actions against crypto mixers and tumblers, including a lawsuit challenging OFAC’s authority to designate Tornado Cash. We conclude by discussing the focus of state regulators on BSA/AML policies and procedures, and steps businesses in the digital asset space can take to mitigate compliance risk.
We hope that you enjoy the podcast, and find it useful.
If you would like to remain updated on these issues, please click here to subscribe to Money Laundering Watch. To learn more about Ballard Spahr’s Anti-Money Laundering Team, please click here. To learn more about Ballard Spahr’s Fintech and Payment Solutions Team, please click here.