The US Treasury has revealed a new report on crypto-related crime, flagging $9 billion in digital asset fraud and proposing measures to regulate decentralized finance (DeFi) platforms. The report, submitted under the GENIUS Act, reviews risks tied to DeFi and proposes changes to how institutions handle suspicious digital assets.
According to Alex Thorn, Galaxy Research Head, the report highlights illicit activity, stablecoin flows, and laundering methods. It also notes that several recommendations appear in draft provisions of the CLARITY Act, offering insight into how lawmakers may regulate DeFi.
The report shows a significant increase in digital asset losses, with $9 billion in fraud reported by the FBI’s Internet Crime Complaint Center in 2024. Investment scams drove most of these losses, with victims reporting about $5.8 billion tied to such schemes.
The Treasury proposal includes a “hold law” for suspicious transactions, which would create a safe harbor for financial institutions and allow them to temporarily freeze suspected illicit funds during short investigations. This measure is expected to shape DeFi compliance obligations.
The report also explores emerging compliance technologies, including artificial intelligence tools used in blockchain analytics and zero-knowledge proofs for digital identity systems. Officials acknowledge limits in current blockchain analysis tools but recognize the importance of privacy technologies serving legitimate purposes.
Overall, the US Treasury’s new report highlights the need for regulation and compliance in the crypto space, with a focus on preventing illicit finance and promoting financial stability.
Source: https://www.livebitcoinnews.com/galaxy-research-head-flags-9b-crypto-fraud-proposes-defi-hold-law