The report examines the vulnerabilities in DeFi, including potential gaps in the United States’ Bank Secrecy Act/anti-money laundering regulatory, supervisory, and enforcement regimes for DeFi. We first discuss how Treasury defines DeFi, the report’s findings regarding the use of DeFi services in the process of transferring and laundering illicit proceeds, the BSA’s application to DeFi services and the impact of decentralization on BSA coverage, and the report’s recommendations. We then discuss state efforts to regulate digital assets and federal enforcement actions against cryptomixers, including the challenge to OFAC’s authority. We conclude with a discussion of the focus of state regulators on BSA/AML policies and procedures and steps businesses in the digital asset space can take to mitigate compliance risk. Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, leads the conversation, joined by Lisa Lanham, a partner in the Group, and Peter Hardy, a partner in and Co-Leader of the firm’s Anti-Money Laundering Group.