From the International desk

US Treasury Reports DeFi Vulnerabilities to Money Laundering

Did you know that scammers from North Korea and other bad actors are exploiting vulnerabilities in decentralized finance (DeFi) to facilitate money laundering?

DeFi is a type of financial system that uses blockchain technology to provide decentralized, peer-to-peer financial services, and is commonly used for activities such as lending, borrowing, and trading digital assets.

However, a recent report from the US Treasury Department suggests that some DeFi platforms are not playing by the rules, making them vulnerable to money laundering and other illicit activities.

The report recommends increased regulatory supervision and guidance for DeFi platforms to ensure compliance with Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) regulations. It's important to note that while DeFi is an innovative and exciting space, most illicit financial activity still occurs outside of the digital asset ecosystem.

You can read more about the report here.

Attention! Hummingbird RegTech has come to the rescue with their new platform, Hummingbird Apps. With this platform, compliance professionals can create their very own customized tech stack to fight financial crime.

The platform integrates with third-party applications and enables compliance investigators to create custom workflows that align with their current processes to help prevent potential financial crime. The platform even offers three types of applications: filing apps, data apps, and integration apps, with the option to create custom apps for an additional fee.

And the App Launcher gives you visibility into the apps set up for your organization and any new apps that might help or be required. So why not level up your compliance game and join the fight against financial crime with Hummingbird Apps!

You can read more of the article here.

EBA draft amendments to risk based supervision guidelines

The European Banking Association (EBA) has shaken things up with a proposal to update its guidelines on anti-money laundering (AML) and countering the financing of terrorism (CFT) supervision. The EBA has recognized that crypto-asset service providers(CASPs) are now part of the financial institution landscape and need to be brought into the fold for AML/CFT purposes.

But wait, there's more!

The proposed changes come with some special treatment for the crypto world such as emphasizing the importance of cooperation among authorities, consistency in setting supervisory expectations, and training for staff.

They also provide guidance on sources of information and effective communication within the sector. The EBA has acknowledged that blockchain analytics and other sources of information are crucial for effective supervision of CASPs.

That's right, the EU leads when it comes to regulation!

Want to learn more about the proposed revisions? You can read the Consultation Paper here.