The TFFC released a report on Thursday outlining the top vulnerabilities in the US financial system. There are, in fact, several systemic flaws and weaknesses in the system and the lack of regulations on disclosing a company’s beneficial ownership data is among the major issues.
Moreover, the report found that the system’s weakness also lies in the lack of foreign jurisdiction on digital assets and the growing misuse of such assets per se. According to experts, the above-mentioned vulnerabilities shed light on the gaps in the current law. As such, the leaders are expected to work with the Congress and private sectors to “fix” the system.
As of the moment, there are no regulations on the state or federal level that require companies to provide information regarding beneficial ownership. Thus, it’s hardly surprising that there are still criminals who misuse legal bodies to hide activities and assets, according to the Treasury Department. Meanwhile, the department also cleared that they don’t have the power to require such disclosures — hence why a legislative action to address this gap is crucial.
Another evolving threat, as pointed out by the report, is the absence of extensive anti-money laundering regulations. For instance, several trust companies and non-federal insured credit unions do not possess any anti-money laundering obligations; certain professionals like lawyers are exempted as well.
In the end, we can conclude that the financial system isn’t always as robust as it looks. The system’s vulnerabilities are being exploited by illicit actors; on the bright side, the US shows ongoing efforts to address the issues.