U.S. Treasury Seeks Public Input on Digital Asset Crime Detection Tools

The U.S. Department of the Treasury has launched a public comment period aimed at gathering insights on the detection of illicit activity involving digital assets. The initiative, mandated under the GENIUS Act, seeks to explore innovative methods that regulated institutions can adopt to monitor and mitigate risks associated with digital finance [1]. The consultation period, which began upon the formal publication of the request in the Federal Register, will remain open until October 17, 2025, providing ample time for stakeholders including financial institutions, technology firms, and the general public to contribute their perspectives [2].

The focus of the public input is on four key technological domains: application programming interfaces (APIs), artificial intelligence (AI), digital identity verification, and blockchain analytics. These areas are critical to the ongoing evolution of tools that support financial transparency and regulatory compliance in the digital asset space. The Treasury is particularly interested in how these tools can improve the ability of regulated entities to detect and report suspicious activity, as well as how emerging technologies might be integrated into existing compliance frameworks [3]. The feedback will also inform the Treasury’s research on the effectiveness, cost implications, privacy considerations, and cybersecurity risks of these tools [4].

This move aligns with a broader regulatory agenda under the GENIUS Act and Executive Order 14178, which emphasizes the need for a secure and transparent digital financial ecosystem while promoting U.S. leadership in digital finance innovation [5]. The Treasury’s request for input is also consistent with the IRS’s parallel effort to gather public feedback on strategies for detecting and preventing fraud in the digital asset space, reflecting a coordinated government approach to addressing illicit financial activity [6].

By engaging a wide range of stakeholders, the Treasury aims to develop a regulatory framework that supports technological innovation while effectively countering financial crime. The outcomes of this public consultation are expected to play a significant role in shaping future policies on digital assets, particularly in the stablecoin sector, which has become a focal point for regulatory scrutiny [7]. Through this structured and inclusive process, the Treasury seeks to ensure that the development and use of digital assets are both responsible and secure [8].

Sources:

[1] https://home.treasury.gov/news/press-releases/sb0228

[2] https://www.federalregister.gov/documents/2025/08/18/2025-15697/request-for-comment-on-innovative-methods-to-detect-illicit-activity-involving-digital-assets

[3] https://www.ledgerinsights.com/treasury-seeks-input-on-digital-asset-illicit-finance-detection-methods/

[4] https://tax.thomsonreuters.com/news/irs-asks-for-help-with-combatting-digital-asset-fraud/

[5] https://www.theblock.co/post/367291/us-treasury-issues-call-for-public-comment-on-illicit-activity-following-trump-signing-genius-stablecoin-act-into-law?utm_medium=rss&utm_source=policy.xml

[6] https://coincentral.com/treasury-seeks-public-ideas-to-tackle-crypto-crime-under-genius-act/

[7] https://idtechwire.com/u-s-treasury-opens-consultation-on-digital-id-in-defi-smart-contracts/

[8] https://crypto.news/treasury-seeks-public-input-on-detection-of-illicit-activity-in-digital-assets/