How do fix the interior part of the concrete foundation that molds?

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My downstairs rooms have about 9-10" of the concrete foundation which is open and was painted. It grows mold every year when the cold weather makes it get condensation especially when beds and furniture block air circulation. It was not encased with a barrier of any kind. Do I need to remove the paint before fixing the problem, and what is the best way of remedying this? Also, the surface is not completely smooth.

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