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The Financial Crimes Enforcement Network (FinCEN) is focusing on DeFi oversight as government bodies strive for stronger sector control following approval of the executive order on digital assets.
The Acting Director of the Financial Crimes Enforcement Network, Himamauli Das, said that his agency was assessing DeFi’s “potential to reduce or eliminate the role of financial intermediaries that play a critical role in our AML/CFT [anti-money laundering/combating the financing of terrorism] efforts.”
U.S. financial regulator FinCEN wants feedback from the banking industry on how DeFi could impact financial crime bureau efforts.
FinCEN has said it is “closely following” DeFi, and the agency’s acting director, Himauli Das, said that crypto is a “key priority” for the agency.
— Fortune Crypto⚡ (@fortune_btc) December 8, 2022
Crypto natives view the removal of intermediaries as a key benefit of DeFi, making it more effective and eliminating counterparty concerns, but FinCEN’s concentration on financial surveillance portrays the presence of intermediates as a pillar of the status quo.
“We are engaging with relevant US government stakeholders in this effort, and we welcome engagement with industry — including the banking community — better to understand your assessment of the vulnerabilities and risks,” Das said.
FinCEN, a unit of the US Treasury Department, is entrusted with using the financial intelligence it collects to fight financial crimes.
Das stated that his organisation would continue to assess the development of digital assets in conformity with ongoing initiatives anticipated to continue in an effort to identify any shortcomings in the AML/CFT legislation.
FinCEN will assess the need for tight regulations in this regard. These initiatives are a component of the executive order on crypto assets that President Joe Biden inked in March.
Since then, a number of government organisations, such as the CFTC and the SEC, which are still fighting for power, have been looking into methods to increase regulatory control of crypto assets.