U.S. Treasury is requesting public feedback on AI tools to combat crypto money laundering

The U.S. Treasury Department is seeking public input on innovative technologies to combat crypto money laundering, following mandates from the recently passed GENIUS Act. The 60-day comment period, which ends on October 17, 2025, focuses on tools such as artificial intelligence, blockchain monitoring, digital identity verification, and application programming interfaces (APIs) to help regulated financial institutions fight illicit digital asset activities.

The request comes amid an alarming rise in crypto-related crime. In the first half of 2025, criminals stole $3 billion in 119 separate incidents, with funds being moved at extraordinary speeds.

U.S. Treasury looks to AI and Blockchain for fighting crypto crimes

A recent study by Global Ledger revealed that crypto criminals are moving stolen funds at a pace 75 times faster than traditional security systems can respond. In many cases, funds are laundered within minutes, often before any public alerts are issued. This makes it difficult for authorities to track and recover stolen assets.

The speed advantage of criminals is compounded by the low recovery rate, with only 4.2% of stolen funds recovered in the first half of 2025. The criminal tactics include synchronized attacks, such as North Korea’s Lazarus Group timing hacks during staff transitions, which exploit the gaps in traditional security measures.

Key tools in the fight against Illicit crypto activities

To combat the rapid rise of crypto crimes, advanced technologies such as artificial intelligence and machine learning are emerging as crucial tools for anti-money laundering (AML) efforts. Notable breakthroughs from companies like Elliptic and IBM Watson have successfully developed deep learning models that detect illicit money laundering patterns by analyzing blockchain data.

Automated systems like Circuit’s technology have also made strides in addressing these challenges, embedding pre-signed fallback transactions to secure funds before an attack can be completed. These tools reduce the time window for intervention from hours to seconds, offering a promising defense against criminal activities.

In addition, experts are highlighting the vulnerability of decentralized platforms to attacks, particularly from manipulation of oracles, which can trick contracts into draining funds. The Treasury’s focus on AI and blockchain monitoring aligns with industry-wide efforts to create faster, more automated defense networks capable of protecting the growing digital asset ecosystem.

GENIUS Act: A game-changer for crypto regulation

The regulatory clarity provided by the GENIUS Act has been a game-changer for the industry, with executives praising the law as the beginning of a new era for digital asset regulation. Ian De Bode, Chief Strategy Officer at Ondo Finance, noted that the clarity brought by the act will speed up the adoption of crypto technologies.

The Treasury’s initiative to gather public feedback highlights the ongoing “arms race” between criminals and defenders in the crypto space. As new risks emerge, the industry continues to push for the development and implementation of cutting-edge solutions to secure the digital asset ecosystem and ensure that illicit activities are curtailed effectively.