US Treasury Demands Public Help to Crush Crypto Crime With New GENIUS Act

Crackdown incoming—Washington wants your ideas to fight digital asset crime.

Under the newly proposed GENIUS Act, the Treasury Department is crowdsourcing solutions to tackle crypto-related illicit activities. Because nothing says 'genius' like bureaucrats finally asking for help after a decade of playing whack-a-mole with blockchain transactions.

Here's what's happening:

The call-out comes as regulators scramble to keep pace with crypto's wild west—where innovation outpaces legislation faster than a memecoin rug pull. No specific figures were given (typical government opacity), but the move signals growing pressure to rein in the sector.

Key takeaways:

- Public comments will shape future crypto surveillance frameworks
- GENIUS Act could expand Treasury's authority over digital asset monitoring
- Industry players brace for yet another regulatory hurdle

One cynical observer might note this is what happens when traditional finance realizes it can't ignore crypto anymore—so instead of adapting, it tries to regulate the life out of it. Stay tuned for more paperwork disguised as progress.

Treasury Focuses On APIs, AI, And Blockchain

The Treasury’s call for public input is a direct requirement of the recently signed into law GENIUS Act, which mandates the Department to explore innovative methods for detecting illicit activities in the digital asset space.

The Treasury is particularly interested in gathering feedback on a range of technologies that could enhance the ability of regulated financial institutions to identify and mitigate risks associated with these digital assets. 

Among the specific areas of focus are application program interfaces (APIs), artificial intelligence (AI), digital identity verification, and blockchain monitoring. 

These tools are considered essential in advancing the fight against illicit finance, although they may also pose new challenges and resource burdens for financial institutions.

In line with the GENIUS Act’s objectives, the public comments will inform research regarding the effectiveness and costs of these technologies, as well as considerations related to privacy and cybersecurity. 

The Treasury Department encourages individuals and organizations to submit their insights within 60 days, with a deadline set for October 17.

Crypto Stablecoin Regulations

The GENIUS Act, signed into law by President Trump, establishes a regulatory environment for payment crypto stablecoin issuers, emphasizing consumer protection and enhancing the US dollar’s status as a global reserve currency. 

It includes provisions for strong reserve requirements and aims to align state and federal frameworks governing stablecoins. Additionally, it mandates that payment stablecoin issuers adhere to federal laws applicable to financial institutions related to economic sanctions, anti-money laundering, and customer identification.

As part of its mandate under the GENIUS Act, the Treasury will conduct research based on public comments and will subsequently issue reports and guidance aimed at enhancing the detection of illicit activities. 

The Treasury has highlighted the importance of APIs, which serve as access points for different software applications, enabling them to communicate and share data efficiently. 

This can enhance transaction monitoring and compliance with anti-money laundering (AML) regulations. AI is also prioritized as a key innovation, enabling financial institutions to analyze vast amounts of data and identify patterns indicative of illicit finance.

Digital identity verification tools are gaining traction in the digital asset sector, helping to establish and confirm the identities of users in a secure manner. The Department highlights that these tools can facilitate compliance with AML requirements while also maximizing user privacy. 

Lastly, the focus also extends to the use of blockchain technology and monitoring allows for the tracking and analysis of transactions on public ledgers, providing valuable insights into potentially crypto illicit activities.

Featured image from DALL-E, chart from TradingView.com