Treasury seeks public comment on innovative methods to detect illicit digital assets

The Treasury Department requested public comment, as Section 9(a) of the GENIUS Act required, seeking input on innovative methods and strategies that regulated financial institutions use—or could use—to detect illicit activity involving digital assets.

Treasury is directed under the Act to focus on four key areas: application programming interfaces (APIs), artificial intelligence (AI), digital identity verification, and blockchain technology and monitoring. The Department is also inviting feedback on other emerging tools, including cryptographic protocols and privacy-enhancing technologies, cloud-based solutions, on-chain compliance tools, oracles, and new verification mechanisms for smart contracts, that could help institutions detect and mitigate illicit finance risks tied to digital assets.