U.S. Treasury Opens Public Consultation to Combat Crypto Crime Under GENIUS Act—Your Voice Matters

The U.S. Treasury is turning up the heat on crypto-related illicit activity—and they want your input. Under the GENIUS Act, regulators are seeking public comments to sharpen their claws against bad actors. Here’s what’s at stake.

Crackdown or Overreach?

With crypto scams and hacks still making headlines, the Treasury’s move signals a push for tighter oversight. But will it stifle innovation—or just add another layer of bureaucracy? The irony? The same folks who missed FTX now want your help cleaning up the mess.

Why This Matters

Public consultations rarely spark fireworks, but this one could shape how regulators wield the GENIUS Act’s enforcement powers. Expect lobbyists to swarm, privacy advocates to howl, and Wall Street to pretend it cares about ‘compliance.’

The Bottom Line

If history’s any guide, new rules will land like a sledgehammer—targeting DeFi while letting TradFi’s money-laundering clubs off easy. Want a seat at the table? Speak up before the suits decide for you.

TLDR

• Treasury opens crypto oversight debate under GENIUS Act, seeks public input.
• GENIUS Act drives new stablecoin rules, Treasury invites feedback on safeguards.
• Treasury calls for ideas on AI, APIs, and ID tools to curb illicit crypto use.
• Stablecoin oversight ramps up as Treasury eyes digital identity and AI tools.
• GENIUS Act launches modern compliance push: Treasury seeks blockchain insights.

The U.S. Treasury Department has launched a public comment initiative under the GENIUS Act to address illicit crypto activity. This initiative opens a 60-day window for feedback on practical tools to detect digital asset crimes. As stablecoins gain traction, the Treasury aims to develop safeguards against misuse by criminals using blockchain networks.

GENIUS Act Spurs Push for Modern Oversight Tools

The GENIUS Act, signed into law in July 2025, created a clear regulatory framework for stablecoin operations in the United States. Under this law, stablecoin issuers must hold full reserves in U.S. dollars or equivalent liquid assets. They must also undergo annual audits if their market value exceeds $50 billion.

Today, Treasury issued a Request for Comment required by the GENIUS Act, which furthers the Administration’s policy of supporting the responsible growth and use of digital assets, as outlined in President Trump’s Executive Order on “Strengthening American Leadership in Digital…

— Treasury Department (@USTreasury) August 18, 2025

The Treasury’s call for public input stems from a legal mandate within the GENIUS Act. It specifically highlights the use of application programming interfaces (APIs), artificial intelligence (AI), digital identity verification, and blockchain monitoring. The goal is to detect illicit activity like money laundering and ensure stronger compliance.

The Act requires stablecoin issuers to be treated as financial institutions under the Bank Secrecy Act. They must comply with federal regulations relating to sanctions, anti-money laundering, customer identification, and due diligence. This aligns with broader national security and financial stability objectives.

Digital Identity, AI, and APIs to Take Center Stage

The Treasury is focusing on how regulated institutions can integrate APIs for seamless data sharing and monitoring. APIs support strict access control, boost transaction visibility, and enhance the integrity of digital asset platforms. These interfaces can LINK internal systems with external partners to improve compliance.

Artificial intelligence will play a critical role in analyzing transaction data at scale. Financial institutions may use AI to detect patterns, assess risks, and identify trends related to illicit behavior. These systems are expected to automate detection efforts and improve speed and accuracy.

Digital identity verification, another focus area, allows firms to confirm user identities with greater precision. By using biometrics and government-issued documents, firms can streamline onboarding and reduce compliance burdens. This technology is also expected to support smart contract execution in decentralized finance environments.

Blockchain Monitoring and Public-Private Collaboration

Blockchain monitoring is essential for tracking activities across public ledgers. Financial firms can use blockchain analytics to trace illicit funds, identify high-risk wallets, and review multi-chain transactions. The Treasury and law enforcement agencies have already adopted these tools in investigations.

The GENIUS Act encourages innovation but acknowledges that new tools may present cost and operational challenges. Financial institutions must assess privacy risks, cybersecurity vulnerabilities, and compliance efficiency when deploying them. Treasury seeks input on how to balance innovation with practical risk mitigation.

The Treasury plans to submit a report to Congress based on the responses received. It may lead to new guidance, rulemaking, or policy adjustments that reflect the evolving crypto landscape. GENIUS is a foundational step, but broader digital asset regulation is expected in coming months.