US Treasury Touches "Crypto-waters"

On 6th of April, the U.S. Department of the Treasury published the 2023 DeFi Illicit Finance Risk Assessment, the first illicit finance risk assessment conducted on decentralized finance (DeFi) in the world. The assessment considers risks associated with what are commonly called DeFi services.

The document is 42 pages long. This report looks at how criminals are using DeFi services to move and hide money illegally. DeFi services use technology called blockchain and smart contracts to allow people to make transactions without banks or other financial institutions.

However, many DeFi services are not following the rules meant to stop money laundering and financing terrorism. Some DeFi services are trying to avoid these rules by claiming to be fully decentralized, but this doesn't excuse them from following the rules.

The report recommends improving the rules and regulations for DeFi services to make sure they follow the laws and don't help criminals.

The cryptocurrency market may face regulatory scrutiny as authorities look to increase oversight on digital assets, so be informed and prepared for real bombshells in the not so distant future.

What do you think is the real target of the Treasury?

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Let me update some crypto charts to snapshot what’s going there. The comparison chart of major cryptos vs. the market follows below. Continue reading "US Treasury Touches "Crypto-waters""

What The Heck Is Defi?

I have to admit: Decentralized Finance – or “Defi” – is one of the most fascinating aspects of the blockchain and cryptocurrencies. In fact, it’s defi that got me really excited about crypto in the first place.

So, let’s get to it!

Defi Simplified

At its heart, defi uses the blockchain to make complicated things happen while cutting out the middleman in the process. Here’s what I mean...

Right now, finance is run by a hub-and-spoke model. And that model hasn’t changed much in a long, long time. In fact, it’s pretty much the same as it was before sophisticated computers and large financial networks.

And you can see why: The hub-and-spoke model organizes most financial transactions into large financial centers around the globe, such as New York and London. When financial transactions are made, activities are generated in one of these centers. Those institutions then determine the details of the transactions and make sure that they are carried out like all the parties intended.
Really, not very complicated. And for the most part, it’s not a bad system. Continue reading "What The Heck Is Defi?"