The U.S. Treasury Department is actively seeking public feedback on innovative methods to detect crypto money laundering, in line with the requirements set forth by the recently enacted GENIUS Act. The 60-day comment period, which will conclude on October 17, is specifically focusing on utilizing artificial intelligence, blockchain monitoring, digital identity verification, and application programming interfaces as potential tools for regulated financial institutions to combat illicit digital asset activities.
This call for feedback comes at a crucial time as crypto criminals have ramped up their operations in 2025, with a staggering $3 billion stolen in 119 separate incidents during the first half of the year alone. Treasury Secretary Scott Bessent has commended the implementation of the GENIUS Act, emphasizing its importance in securing American digital asset leadership while also expanding dollar access globally through regulated stablecoin frameworks.
The speed at which crypto criminals are able to execute their illicit activities far surpasses traditional security measures. Recent blockchain analytics have revealed that hackers can move funds in as little as four seconds following an attack, which is approximately 75 times faster than the average response time of exchange alert systems. In over 68% of cases, stolen funds are moved before the incidents are even publicly known, with one in four hacks successfully laundering assets before any public statements or alerts are issued.
Despite the economic disincentives for hackers to hold onto stolen crypto due to improved on-chain forensics and legal risks, the recovery rates for stolen funds remain dismally low. Only 4.2% of stolen funds were recovered in the first half of 2025, with sophisticated actors like North Korea’s Lazarus group strategically timing their movements to coincide with normal transaction activity to avoid detection.
To combat these evolving threats, advanced technology solutions such as artificial intelligence and machine learning are being leveraged to detect money laundering patterns on the blockchain. Deep learning models have been developed to analyze transaction chains and identify suspicious activities. Automated recovery systems, like those offered by Circuit, are also proving to be effective in responding to threats in real-time.
The GENIUS Act’s regulatory framework has provided much-needed legal clarity for the industry, with executives acknowledging it as the beginning of a new regulatory era. Moving forward, the Treasury’s initiative to gather public input on anti-money laundering technologies underscores the ongoing arms race in the crypto industry, where criminal innovation consistently outpaces defensive capabilities.
As the digital asset ecosystem continues to grow, the integration of advanced AI detection and automated response systems will be crucial in safeguarding against increasingly sophisticated threats. The industry as a whole recognizes the importance of staying ahead of these challenges and remains committed to developing robust solutions to protect the integrity of the crypto market.