Imagine a world in which a person could take out and then pay\u00a0off millions of dollars of loans without providing their personal\u00a0identification. This world exists for anyone who has an internet\u00a0connection. Anyone with internet access can reach the decentralized\u00a0finance (DeFi) ecosystem, an online network of financial products and\u00a0services that allows people to lend, borrow, buy, and sell directly with\u00a0others. The network of transactions on a DeFi platform are visible in\u00a0real time, but each user transacts under a pseudonym. As such, two key\u00a0features of the DeFi ecosystem are that 1) it promises user\u00a0pseudonymity and 2) there are no central authorities or institutions that\u00a0can deny exchanges or user access to a transaction. DeFi removes the\u00a0middlemen from transactions, allowing any individual to exchange with\u00a0any other individual anywhere in the world.\u00a0DeFi countervails widespread trends toward a data-centric\u00a0economy. In traditional finance where banks are the intermediaries,\u00a0customers must provide personal data before opening an account or\u00a0applying for a loan. Even beyond the banks, personal information is\u00a0widely available. That information may dictate other aspects of a\u00a0person\u2019s economic reality, such as their performance on an employment\u00a0screening test, how much they pay for a seat on an airplane, and the\u00a0types of products advertised to them on their social media platform of\u00a0choice. While our data drives an increasingly large amount of our\u00a0personal and collective economic activity\u2014contributing to\u00a0discrimination11 and information silos\u2014pseudonymous DeFi\u00a0transactions make it harder to discriminate against certain users on DeFi\u00a0platforms. But this comes at a potentially high cost. When anyone in the\u00a0world can invest and exchange on DeFi platforms, the networks become\u00a0vulnerable to malicious actors ranging from attackers who short\u00a0currency to terrorist groups that use DeFi for crowdfunding and idea\u00a0proliferation. This demands tighter regulation of DeFi and strategies\u00a0for patrol and prosecution of national security threats enabled through\u00a0these networks.\u00a0This Essay argues that while there are many advantages to the\u00a0extensive adoption of the DeFi ecosystem, it is necessary to consider\u00a0national security threats that arise as people around the world\u00a0increasingly transact on this market. The existence of DeFi threatens\u00a0national security because bad actors can illicitly finance weapon sales\u00a0and use the identity-free globalized network to expand their influence.\u00a0While certain elements of DeFi improve law enforcement\u2019s ability to\u00a0track, predict and prepare for attacks, other elements of the digitized\u00a0financial system help bad actors evade detection by law enforcement\u00a0domestically and internationally. Part I of this essay will provide a brief\u00a0introduction to decentralized finance. Part II will demonstrate the\u00a0relationship between DeFi and U.S. national security interests. Part III\u00a0will discuss the strategies to mitigate national security risks that\u00a0accompany DeFi, with an emphasis on how access to, and\u00a0accountability over, personally identifiable information shapes threats\u00a0of criminal activity.<\/p>\n