As a reminder, decentralised finance is a sector of blockchain-based applications that essentially replace banks for people. In other words, they allow you to borrow and lend crypto-assets, although the functionality of DeFi platforms does not end there. One of the most popular examples of such platforms is the decentralised exchange Uniswap, which allows you to exchange some tokens for others without centralised intermediaries.

It is worth noting that such exchanges operate on the basis of transparent smart contracts, which can be evaluated by anyone. In addition, all transactions are transparent, which makes the industry much less closed to ordinary users – which is not the case with banks.

In any case, it is the DeFi industry that the US authorities have taken to criticism.

Why they criticize decentralized cryptocurrencies

Based on its findings, the department is recommending an assessment of “possible improvements” to anti-money laundering (AML) and counter-terrorist financing (CFT) regulations that should apply to the DeFi sphere in the US. And it is a hint that US regulators will only continue to “tighten the screws” on crypto.

The report cites several examples of DeFi startups “affirmatively claiming the absence of AML/CFT as one of the main goals of decentralisation”. That said, virtually all centralised crypto venues are collecting information about their customers and working to crack down on transactions with funds that have been obtained illegally.

Moreover, almost all major centralised exchanges now require users to reveal their identity in order to start interacting with them. In other words, if a person does not show their own documents, they will not be able to trade and deposit assets on the trading platform. Of course, there are exceptions in this regard even now, but there are fewer as time goes on.

While the purpose of the report is only to “determine the extent of the problem”, the analysts recommend that the US government strengthen its anti-money laundering and counter-terrorist financing oversight. They also advocate the possibility of providing additional guidance to startups based on how they can meet regulatory requirements.

According to CoinDesk’s sources, experts also touched on the US President Joe Biden’s administration’s handling of direct oversight of what is happening in the crypto industry. The White House directives were a “first of their kind” compared to what is happening in other countries.

Finally, another important message from the publication is that the field of decentralised finance can present difficulties when trying to figure out the individuals behind the management of certain companies. However, in determining whether their services fall under the Bank Secrecy Act, it does not matter whether they are centralised or decentralised.

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At the same time more interesting details about the closure of Signature Bank in the US emerged this week. As a reminder, it was previously speculated that the fact that Signature was actively collaborating with various crypto start-ups played a big part in this.

In particular, Galaxy Digital CEO Mike Novogratz previously voiced a similar view. According to him, the authorities' March campaign against cryptocurrency giants was carefully planned, and by doing so, the government wanted to create major problems for the digital asset industry. You can read more of his views here.

However, in an interview, New York State Department of Financial Services (NYDFS) Superintendent Adrienne Harris refuted these rumours. Here’s the relevant rejoinder, cited by CryptoPotato.

The idea that Signature’s closure was related to cryptocurrencies or a targeted campaign against them is ludicrous.

However, the New York State Department of Financial Services has previously urged companies to separate customers’ cryptocurrency assets from their own, as sharing money can lead to significant financial losses. In the interview itself, Harris elaborated on the outlook for the crypto industry.

According to her, crypto still lacks “maturity” despite its growing popularity. This is especially true of the management practices in many cryptocurrencies. She continues.

There is still a lack of maturity in the areas of bank secrecy law enforcement, anti-money laundering and cybersecurity. We look forward to the day when these systems become more mature and large-scale, just like business.


Previously, it was negligence and disregard for their obligations that were the fatal factors for the FTX exchange. So government oversight of such giants on an industry scale does need to be in place. But it should be implemented in a reasonable manner and without excessive pressure.

It is also worth noting that such accusations seem rather ridiculous today. All the same, the actions of the bankers on the eve attracted problems for ordinary people, contrary to the very "maturity" of the banking industry and the active fight against money laundering. So we can conclude that all of the above factors will not be effective if central banks around the world continue to print money recklessly and the Fed continues to raise the benchmark interest rate at a record pace. Which means cryptocurrencies do not look too scary and radical in the current environment.


It’s fair to say that the authorities’ report also had some common sense. In particular, the authors of the document acknowledged that fiat money is used far more often than digital assets for money laundering, terrorist financing and other crimes. Here is the relevant part of the document.


We think this kind of rhetoric about the field of decentralised finance is rather odd. Yes, DeFi-platforms can be used by anyone, but the interaction with them is absolutely transparent. Accordingly, nothing prevents law enforcement agencies from looking into how a particular platform has been used by an entity of interest to them. Again, a potential ban on such platforms would not force people to stop using them, as a VPN connection would solve most of the restrictions.