Cryptocurrency exchange security is being hotly debated as digital assets draw more attention from consumers, investors, regulators and fraudsters. The values of cryptocurrencies are famously volatile and users can trade certain tokens anonymously or while using pseudonyms. These combined factors can attract both privacy-focused investors eager to gamble on favorable cryptocurrency market trends and also lure fraudsters who hope to hide their identities while conducting financial crimes. The current cryptocurrency frenzy is further creating a lucrative environment in which cybercriminals can carry out their schemes.
In its new guidance, the FATF defined most operators of decentralized finance (DeFi) platforms as “Virtual Asset Service Providers” (VASPs). That means that, if the guidelines are adopted in the US and other major jurisdictions as proposed, many DeFi platforms will have to find a way to comply with rules around combating financial crimes. But that won’t be as easy as it may sound.