U.S. Treasury Department Report: Criminals and Scammers Are Increasingly Turning to Cryptocurrencies

The U.S. Department of the Treasury has released its 2024 National Money Laundering, Terrorist Financing, and Proliferation Financing Risk Assessment Report, which highlights illicit financial threats, vulnerabilities, and risks within the United States. Its report said criminals, scammers and illegal actors are increasingly turning to virtual assets. The report details how bad actors launder money through the continued use of cash and the increasing use of cryptocurrencies to commit fraud, drug trafficking, people smuggling and corruption. The U.S. Treasury Department said it plans to release a strategic plan in the coming weeks aimed at providing recommendations to address these issues. The report states that under the Bank Secrecy Act (BSA), DeFi services belonging to financial institutions must comply with anti-money laundering/anti-terrorist financing (AML/CFT) regulations. “Nevertheless, many existing DeFi services fail to comply with AML/CFT obligations, a vulnerability exploited by illicit actors.” Criminals are looking to exploit new financial services, including DeFi and online gaming. The U.S. Treasury Department also expressed concern about the increased use of stablecoins in the report: “The 2022 National Terrorist Financing Risk Assessment (NTFRA) report shows that terrorist organizations most commonly solicit donations of virtual assets in the form of Bitcoin; Asset donations to terrorist groups are increasingly turning to stablecoins.” (The Block)