US Treasury Crowdsources Crypto Crime Fighters – Public Input Wanted to Crack Down on Illicit Activities
Crypto's Wild West era may be ending—or at least getting a new sheriff. The US Treasury Department just opened the floor to public proposals for combating illicit cryptocurrency transactions. No more backroom debates; they're crowdsourcing solutions like a blockchain governance vote (but with less meme potential).
The Ask: Your Brain, Their Bureaucracy
Want to help shape crypto regulation without spending $2,500/minute on K Street lobbyists? Now's your chance. The Treasury seeks concrete strategies—not the usual 'educate users' platitudes—to track and disrupt criminal crypto flows. Think Chainalysis on steroids, or decentralized watchdog DAOs.
Why Now? Follow the Money (Laundering)
With crypto markets recovering and institutional players piling in, bad actors see bigger opportunities. The Treasury's move signals they'd rather harness crypto-native expertise than repeat the ham-fisted regulatory approaches of 2021. Still, expect at least one proposed solution to involve 'blockchain analytics AI'—Wall Street's favorite buzzword combo since 'quantum trading.'
The Irony Isn't Lost On Us
A centralized authority soliciting decentralized solutions to police decentralized finance? Only in crypto. Submit your ideas before they outsource this to a Silicon Valley 'public-private partnership' that'll IPO at a $10B valuation next year.
US Treasury calls for public opinion on illicit crypto activities
The US Treasury Department has invited public comments on how financial institutions can better detect illicit activity involving cryptocurrencies, according to a statement on Monday.
The request is a requirement under the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, which was signed into law by President Donald Trump in July, becoming the first official crypto regulation. It is designed to establish a comprehensive regulatory framework for stablecoin issuers in the US.
The GENIUS Act specifically focuses on anti-money laundering (AML) and sanctions compliance, requiring that Treasury bills fully back all stablecoins issued to maintain stability.
The Treasury Department stated that it is open for individuals and organizations to suggest "innovative or novel methods, techniques, or strategies" that can be deployed to monitor and prevent misuse of digital assets. Particularly, the agency is seeking public comments about application programming interfaces, artificial intelligence, digital identity verification, and the use of blockchain technology and monitoring.
The Federal Reserve stated that it has provided a 60-day window for responses, with an October 17 deadline for submissions.
The MOVE is in line with President Trump's executive order signed in January to establish regulatory clarity for crypto. It also underscores the government's objective to "make America the crypto capital of the world."
Following the statement, Treasury Secretary Scott Bessent said in an X post on Monday that stablecoin adoption could lead to increased demand for US Treasuries.
"Stablecoins will expand dollar access for billions across the globe and lead to a surge in demand for US Treasuries," wrote Bessent. He added that the continuous push for Dollar-backed cryptocurrency adoption is a "Win-win for everyone involved," including users, issuers and the US Treasury Department.
