On August 18, the Treasury issued a request for public comment on technologies and strategies to help financial institutions identify and mitigate illicit financial risks involving digital assets. The notice solicited feedback on application programming interfaces, AI, digital identity verification, and blockchain monitoring. Specifically, the Treasury sought input on how regulated financial institutions have used these or other novel methods to detect illicit activity. These activities may include money laundering and sanctions evasion in the digital asset ecosystem; the Treasury was also interested in whether the novel mechanisms are being used to augment existing methods or replace them.

The request outlines factors for evaluating the effectiveness in detecting illicit activity, costs to institutions, privacy and cybersecurity risks, operational challenges, and overall impact on financial crime mitigation. The notice follows the enactment of the GENIUS Act on July 18. The Treasury will incorporate the feedback in legislative or regulatory proposals as well as in a prospective report to Congress. Comments will be due by September 30 and may be submitted electronically.