What to Know
- The U.S. Department of the Treasury has officially opened a comment period for those who want to share ideas about detecting and preventing illicit activity in crypto.
- This initiative has been prompted by the recently passed GENIUS Act stablecoin law.
The U.S. Treasury Department is seeking new ideas for detecting and mitigating illicit crypto activity as it begins implementing the new stablecoin law.
The Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act — the first major U.S. law to establish a regulatory system for the crypto sector — mandates government action to limit risks from bad actors in digital assets. The Treasury is inviting public comments “to identify innovative or novel methods, techniques, or strategies that regulated financial institutions use, or have the potential to use, to detect illicit activity, such as money laundering, involving digital assets.”
The crypto sector will have a 60-day window to provide input on measures to curtail misuse of cryptocurrencies, as per the department’s announcement.
The GENIUS Act is entering what is typically a lengthy process of implementation following its passage into federal authority oversight. The U.S. banking regulators, including the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp, will develop policies for future monitoring of stablecoin issuers. Despite this, GENIUS is just the initial part of two legislative priorities for the crypto space, with further actions awaited from Congress on a bill aimed at establishing broader regulations for digital asset markets.
President Donald Trump has accelerated the creation of crypto-friendly policies, issuing multiple directives instructing federal regulators to develop standards after years of hesitance and legal battles from the federal government. Leaders of agencies such as the Securities and Exchange Commission have indicated they may proceed with some tasks before Congress finalizes its legislation.
