The US Treasury Department said Friday that violent foreign and domestic extremists use virtual assets to move funds.
Domestic Violent Extremists (DVEs) and foreign Racially and Ethnically Motivated Violent Extremists (RMVEs) have raised, moved, or used funds "pseudonymously" by virtual assets, it said in a statement.
The agency said it held a roundtable to discuss challenges in identifying and reporting misuse of virtual assets by these groups.
DVEs are defined as an individual operating in the US without direction from a foreign terror group or other foreign power who seeks to further political or social goals through unlawful acts of force, according to the US' Director of National Intelligence.
RMVEs use political and religious justifications to support their racially- or ethnically-based ideological objectives and criminal activities, it said.
Elizabeth Rosenberg, assistant secretary for terrorist financing and financial crime, said in a separate statement that several techniques involve decentralized finance (DeFi) services.
Such techniques include exchanging virtual assets on blockchains, sending virtual assets through mixers, some of which are decentralized, and placing virtual assets in liquidity pools as a form of layering, she said.
The Treasury Department said earlier this month that cybercriminals and ransomware attackers are using DeFi services to transfer and launder illicit proceeds. As such, actors are able to exploit vulnerabilities since many DeFi services that have anti-money laundering and countering the financing of terrorism obligations fail to implement them.