U.S. Treasury Report Proposes AML rules for DeFi Sector

• U.S. Department of the Treasury recommended AML and counter-terror financing rules for DeFi platforms.

• The report proposes a digital asset “hold law” allowing institutions to freeze suspicious crypto funds during investigations.

• Federal Bureau of Investigation data cited in the report estimates $9B in crypto fraud losses in 2024.

The U.S. Department of the Treasury submitted a report to Congress under the GENIUS Act recommending anti-money laundering rules for DeFi platforms. According to Alex Thorn, the document also proposed a digital asset “hold law.” The proposal would allow institutions to freeze suspicious funds during investigations without a court order.

Treasury Report Outlines DeFi Compliance Proposals

The report recommends extending AML and counter-terrorism financing obligations to decentralized finance applications. Officials argued that DeFi systems should follow similar financial monitoring requirements.

According to Thorn, the report also suggested a “hold law” safe harbor for digital assets. This mechanism would allow institutions to freeze suspicious funds temporarily. Notably, the measure would not require an immediate court order.

Instead, institutions could pause transfers while authorities investigate possible financial crimes. The proposal appeared in a report delivered to Congress under the GENIUS Act framework.

Lawmakers now review the recommendations as part of broader digital asset oversight discussions. The report also examined criminal activity connected to cryptocurrency transactions. These findings introduced additional context for the proposed policy measures.

Crypto Crime Data Highlighted in Federal Report

The report referenced new figures compiled by the Federal Bureau of Investigation. According to the data, crypto-related fraud losses reached roughly $9 billion in 2024. Officials cited these figures while discussing financial crime risks linked to digital assets.

As a result, policymakers continue exploring enforcement tools within the crypto sector. However, the document also addressed cybersecurity priorities affecting digital asset infrastructure.

That discussion appeared in the United States’ updated national cybersecurity strategy released March 6.The strategy marked the first time federal cyber policy directly referenced cryptocurrencies and blockchain technologies.

Cybersecurity Strategy Includes Crypto and Quantum Concerns

The strategy placed cryptocurrencies and blockchain within the country’s national cyber defense framework. According to Thorn, previous cybersecurity strategies never directly mentioned these technologies.

The document states that federal agencies will support the security of blockchain systems. Officials also plan to strengthen digital infrastructure and supply chains. Meanwhile, another section addresses criminal financial networks in digital systems.

Thorn noted that such language could support enforcement actions targeting crypto mixers and privacy tools. Additionally, the strategy discussed quantum computing risks.

Nic Carter highlighted references to post-quantum cryptography and zero-trust security models. The document also emphasized artificial intelligence security and cybersecurity workforce development across federal systems.