North Korean Scammers Using DeFi Platforms to Launder Money

North Korean Scammers Using DeFi Platforms to Launder Money

US Treasury Report Suggests Crypto Regulations

A report released by the US Treasury stated that North Korean scammers are using decentralized finance (DeFi) platforms in their business to launder dirty money. Since DeFi´s nature is decentralized it becomes easier for bad people to go hidden with their activities as all transactions become conducted without intermediaries and are therefore invisible in some way. The US government is considering implementing regulations against the issue in hand since it´s a platform for many illegal activities mostly tied to money laundering and terrorist financing.

Us Crypto News Concerns​

DeFi platforms work just like blockchain technology and it allows users to make financial transactions without it going through a middleman like banks. It relies on smart contracts which makes the transaction process automatic and eliminates the need for banks and its transaction costs are reduced. But even though it sounds like the better way to go it can also be quite unorthodox since there is a huge lack of regulations. Therefore criminals have been very attracted to the DeFi platform considering it´s easier to get away with the money when heads are turned. Cryptocurrencies can be transferred anonymously across borders and this is why the US Treasury highlights the need for an increase of regulations towards DeFi. The suggestion that has come to mind is to expand the Financial Crimes Enforcement Network (FinCEN) regulations to cover DeFi platforms and to let the Securities and Exchange Commission (SEC) monitor activities related to the matter.

Scammers Will Always Exploit DeFi and Bitcoin for Money

The report is also stating that they´d like DeFi platforms would take action against the illegal activities themselves. There are different kinds of solutions to this problem like implementing know-your-customer (KYC) and anti-money laundering (AML) measures. Another trick is to enhance their own cybersecurity defenses, but this is all up to them. As the world is going through a more digital age it´s more likely to see criminals exploiting technology to launder money or carry out other illegal activities around the world. The North Korean scammers are just a great example of this up-and-coming crime spree.

Ending Bitcoin Money Laundering

These recent events have triggered something in the US government, especially seen in their response to the use of DeFi by the North Korean scammers, and it seems like they are definitely taking this seriously. Only time will tell if we can keep up with technology and its rapid pace will prevent platforms to take action against illicit activities. The DeFi industry will work towards making it a safer place for now, and then see where everything will lead.