The U.S. Department of the Treasury has submitted a significant report to Congress under the GENIUS Act, recommending the extension of anti-money laundering (AML) and counter-terrorism financing obligations to decentralized finance (DeFi) platforms. The report, highlighted by industry analyst Alex Thorn, also proposes a novel "digital asset hold law." This mechanism would grant institutions the authority to temporarily freeze suspicious crypto funds during investigations without requiring an immediate court order, allowing transfers to be paused while authorities probe potential financial crimes.
The report cites alarming data from the Federal Bureau of Investigation, which estimates crypto-related fraud losses reached approximately $9 billion in 2024. This figure was used by officials to underscore the financial crime risks associated with digital assets and to justify the need for enhanced enforcement tools within the crypto sector.
In a related but nuanced development, the same Treasury report acknowledges that cryptocurrency mixers can serve legitimate privacy purposes. It states, "As consumers increase their use of digital assets for payments, individuals may want to use mixers to maintain more privacy in their consumer spending habits." The report recognizes lawful users may leverage mixers to protect sensitive information on personal wealth, business payments, or charitable donations from permanent public blockchain exposure.
However, the Treasury simultaneously warns of heightened risks, particularly from non-custodial or decentralized mixers, describing them as common tools for laundering funds tied to cybercrime and sanctions evasion. The report specifically notes that cybercriminal groups linked to North Korea have used these services to move stolen funds.
This regulatory discussion is set against the backdrop of the recently updated U.S. national cybersecurity strategy (released March 6), which for the first time directly references cryptocurrencies and blockchain technologies within the country's cyber defense framework. The strategy commits federal agencies to supporting the security of blockchain systems and addresses criminal networks in digital systems, language which Thorn suggests could support enforcement actions against mixers and privacy tools.
