U.S. Treasury Department Starts Work on GENIUS, Gathering Views on Illicit Activity

The U.S. Treasury Department is seeking new ideas for detecting and cutting off illicit crypto activity as it begins to put the new stablecoin law into effect.

The Guiding and Establishing National Innovation for U.S. Stablecoins ($GENIUS) Act — the first major U.S. law to erect a regulatory system in the crypto space — called for government action on limiting dangers from bad actors in digital assets, and the Treasury Department is asking for public comments "to identify innovative or novel methods, techniques, or strategies that regulated financial institutions use, or have the potential to use, to detect illicit activity, such as money laundering, involving digital assets."

The crypto sector will have a 60-day comment window to share industry views on clamping down on shady crypto use, according to the department's request on Monday.

The $GENIUS Act is now entering into what is typically a protracted period of implementation when a new financial-regulation law enters the arena of the federal agencies that need to put it into effect. The U.S. banking regulations, such as the Office of the Comptroller of the Currency and Federal Deposit Insurance Corp. will also have policies to work out in the future oversight of stablecoin issuers.

But $GENIUS was only the first and less significant piece of the two-part legislative priority for the crypto industry. The sector still awaits further action from Congress on the bill that would set up guardrails for the wider digital assets markets. The House of Representatives was in the lead in recently passing its Digital Asset Market Clarity Act with a wide bipartisan vote, but when the Senate returns from its summer break, it'll take the reins in shaping that legislation under a slightly different approach than the House.

President Donald Trump has pushed his administration into rapidly crafting crypto-friendly policies, issuing multiple executive orders and statements driving federal regulators to set standards after years of resistance and legal challenges from the U.S. government. Agency heads such as Securities and Exchange Commission Chairman Paul Atkins have suggested that they can get some of the work done even before Congress finishes its crypto tasks.

Read More: Trump Signs $GENIUS Act Into Law, Elevating First Major Crypto Effort to Become Policy