LOS ANGELES - The booming world of decentralised finance , which has collected more than US$11 billion in cryptocurrencies in a matter of months, is a potential haven for money laundering, according to new research.
"The last six to eight weeks have shown it to take off unbelievably," Mr Jevans said in an interview."Regulators are taking note when US$1 billion flows into something a week after it started." Many new defi applications allow users to earn interest on crypto loans they make or to use one digital currency to get a loan in another coin. They should fall under the jurisdiction of the Securities and Exchange Commission because many coins are securities, Mr Jevans said. And money-service business rules should apply, he said.
CipherTrace analysed more than 800 virtual-asset service providers such as exchanges, over-the-counter trading desks, currency swap systems and defi applications. It found that 60 per cent of countries had lax controls in Europe, the worst region for KYC standards.