On March 6, 2026, the Treasury Department published a report to Congress entitled “Innovative Technologies to Counter Illicit Finance Involving Digital Assets.” Required under the GENIUS Act, the report evaluates how financial institutions can use new technologies to detect and prevent illicit finance involving digital assets, and recommends regulatory and policy actions.
The report identifies a number of risks associated with digital assets, including money laundering, sanctions evasion, ransomware payments, online fraud and scams, and theft by cybercriminals. The report highlights particular risks associated with mixers and tumblers, decentralized finance (DeFi) platforms, and self-hosted wallets. The report also highlighted technological tools that could improve anti-money laundering and sanctions enforcement, such as artificial intelligence, digital identity systems, blockchain analytics, and application programming interfaces.
The report concludes with a series of recommendations to Congress, including:
- Congress should consider specifying actors within the decentralized finance ecosystem that should be subject to AML/CFT obligations, taking into consideration those actors’ roles in the ecosystem and attendant risks.
- Congress should consider how to best safeguard the U.S. financial system from money laundering threats that originate abroad, including those in the decentralized finance ecosystem. Such steps should include authorizing Treasury to prohibit, or impose conditions upon, certain “transmittals of funds” that are not tied to a correspondent banking relationship.
Congress should consider creating digital asset-specific financial institution types or subtypes within the BSA, such that the new types or subtypes would be subject to AML/CFT obligations. Pending additional market structure legislation being considered by Congress, FinCEN should evaluate whether and how its existing guidance related to the digital asset sector, including guidance issued in 2013 and 2019, should be rescinded, modified, or updated to reflect legislative and regulatory changes.