FATF calls for action on DeFi risks

The FATF has highlighted how the features of decentralised finance are being increasingly exploited by criminals, and is disappointed that almost 93% of the reporting jurisdictions that responded to its survey said they had not yet implemented Recommendation 15 (on virtual assets) in relation to qualifying DeFi arrangements – and only 2 countries have licenced or registered a DeFi arrangement.

A FATF report identifies a list of on-chain and off-chain indicators of control and sets out recommendations on how to help manage risk and protect the system. It says more jurisdictions should be allocating more resource to understanding, supervising and developing approaches to mitigate the risks that DeFi arrangements present.