Everything is a threat to "national security", a blanket term that allows agencies to engage in some target practice.
The Report: Illicit Finance Risk Assessment of Decentralized Finance
“Defi services at present often do not implement AML/CFT controls or other processes to identify customers, allowing layering of proceeds to take place instantaneously and pseudonymously, using long strings of alphanumeric characters rather than names or other personally identifying information.”
Yeah, because AML is so very effective!
One truth that the Defi cheerleaders should note:
The degree to which a purported DeFi service is in reality decentralized is a matter of facts and circumstances, and this risk assessment finds that DeFi services often have a controlling organization that provides a measure of centralized administration and governance.
Yep, most Defi is not really decentralised at all - just distributed, possibly.
Within the pages of scaremongering, we do find two nuggets. Firstly, illicit use of Defi is a very small proportion of the sector, and secondly, “money laundering, proliferation financing, and terrorist financing most commonly occur using fiat currency or other traditional assets rather than virtual assets.”
Much ado about nothing, apart from the rapacious desire to control everything - and that includes controlling what is and isn't in the shadows.
The Moon looks so big when viewed through a telescope.