Fintech (Financial technology) concept.

Background and Scope

The Assessment was drafted by Treasury’s Office of Terrorist Financing and Financial Crimes (“TFFC”), in consultation with multiple U.S. agencies, including the Departments of Homeland Security, Justice, and State; the Commodity Futures Trading Commission (“CFTC”); Office of the Comptroller of the Currency; and the Securities and Exchange Commission (“SEC”). The TFFC also considered over 75 responses to Treasury’s requests for comments.

The Assessment notes that it “does not alter any existing legal obligations, issue any new regulatory interpretations, or establish any new supervisory expectations.” Importantly, the Assessment “recognizes that most money laundering, terrorist financing, and proliferation financing by volume and value of transactions occurs in fiat currency or otherwise outside the virtual asset ecosystem via more traditional methods” and notes that DeFi accounts for “only a relatively small portion of total activity in virtual asset markets.”

Read full alert.