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Genuine DeFi as Critical Infrastructure: A Conceptual Framework for Combating Illicit Finance Activity in Decentralized Finance

Rebecca Rettig et al.

Journal of Financial Regulation2025https://doi.org/10.1093/jfr/fjaf005article
ABDC B
Weight
0.37

Abstract

Combating illicit financial activity in permissionless blockchain-based financial systems—referred to as ‘decentralized finance’ or ‘DeFi’—has challenged regulators and policymakers. Traditional financial integrity laws and regulations—dealing with anti-money laundering (AML), countering the financing of terrorism (CFT), and sanctions—attach to intermediaries, including, with respect to AML/CFT obligations, those intermediaries the Bank Secrecy Act defines as ‘financial institutions’. This article proposes a framework to effectively detect, deter, and prevent illicit financial activity in DeFi, while preserving the technology as permissionless, neutral infrastructure. The three-part proposal sets forth a definition of ‘independent control’ in order to identify smart contract-based financial protocols that do not constitute DeFi; seeks to classify genuine DeFi protocols as ‘critical infrastructure’, subject to oversight and security coordination by the Treasury Department’s Office of Cybersecurity and Critical Infrastructure Protection; and suggests that new laws could require certain businesses necessary to the transmittal of communications about DeFi transactions to take on additional illicit finance risk-management practices without being subject to the Bank Secrecy Act.

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https://doi.org/https://doi.org/10.1093/jfr/fjaf005

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@article{rebecca2025,
  title        = {{Genuine DeFi as Critical Infrastructure: A Conceptual Framework for Combating Illicit Finance Activity in Decentralized Finance}},
  author       = {Rebecca Rettig et al.},
  journal      = {Journal of Financial Regulation},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.1093/jfr/fjaf005},
}

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Evidence weight

0.37

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.16 × 0.4 = 0.06
M · momentum0.53 × 0.15 = 0.08
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.