The U.S. Treasury has submitted a report to Congress under the GENIUS Act, as stated by Galaxy Research Head Alex Thorn, recommending that decentralized finance (DeFi) applications be subject to anti-money laundering and counter-terrorism financing obligations while proposing a “hold law” safe harbor that would allow institutions to freeze suspicious funds without a court order during investigations. This report comes in light of a significant rise in crypto-related crime, with the FBI reporting approximately $9 billion in fraud losses in 2024. Notably, these recommendations also align with provisions proposed in the emerging CLARITY Act draft, which aims to establish a comprehensive framework for stablecoin issuers and ensure proper oversight.
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