US Treasury Says Decentralized Crypto Markets Threaten National Security

The U.S. Department of the Treasury has issued a stark warning, stating that the rise of decentralized cryptocurrency markets poses a significant threat to national security. According to a new report from The U.S. Department of Treasury, decentralized finance (DeFi) services threaten national security and need to comply with anti-money laundering and terrorist financing laws.

WASHINGTON - Today the U.S. Department of the Treasury published the 2025 DeFi Illicit Finance Risk Assessment, the first illicit finance risk assessment conducted on Decentralized cryptocurrencies, according to the Treasury, pose a threat to national security. Regarding the risk assessment for illicit funding in 2025, the US Treasury highlighted key vulnerabilities.

In an April 6 report assessing the illicit finance risks in DeFi, the Treasury found that cybercriminals, including malicious actors from North Korea, used decentralized technologies to launder money and evade sanctions. Poor cybersecurity practices within the decentralized finance (DeFi) industry present a threat to crypto, consumers, and national security.

The US Treasury’s warning is likely to lead to increased regulatory scrutiny of DeFi platforms and other decentralized cryptocurrency markets. Regulators may seek to implement stricter rules and oversight to combat illicit finance activities within the decentralized space. The department is urging DeFi platforms to implement stronger security measures and comply with existing regulations to mitigate these risks.

The report emphasizes the urgent need for regulatory frameworks that address the unique challenges posed by decentralized finance while preserving innovation. This increased scrutiny aims to protect consumers, the broader financial system, and national security interests from the potential misuse of decentralized cryptocurrencies.