The U.S. Department of the Treasury has released a report to Congress examining innovative technologies such as artificial intelligence (AI), cryptocurrency network analysis or blockchain, application programming interfaces (APIs), and digital identity tools to detect and mitigate illegal activity in the use of digital assets.
This report is a result of the strict mandate of the GENIUS Act signed by President Trump on July 18, 2025. To prepare the report, Treasury analyzed more than 220 testimonies from blockchain intelligence companies and banking associations following a public consultation that concluded in October last year.
The primary objective is to provide financial institutions with a more sophisticated way to identify money laundering and terrorist financing in an increasingly complex digital asset environment.
This study quantifies the threat that has dramatically escalated. Investment fraud, known as so-called “pig slaughter,” drained $5.8 billion in 2024, marking a 47% increase from the previous year.
At the same time, U.S. national security is being compromised by threat actors linked to North Korea, who committed $2.8 billion theft between January 2024 and September 2025, including a major $1.5 billion attack in February of this year.
These criminal networks are using crypto mixers to launder money, and this tactic is also being adopted by questionable countries. The Treasury Department cited specific examples of Russia and Iran using stablecoins backed by the ruble or tied to oil sales to avoid being surrounded by international sanctions.
AI tools can also be used for entity resolution using graph analysis that maps connections between wallets, exchange platforms, and actors external to the blockchain. This analysis can uncover complex activity on multi-jurisdictional networks that may evade detection by traditional rules-based systems that rely on more stringent heuristics to detect fraud.
US Treasury report
The utility of these technologies allows them to process large amounts of data in real time and detect hidden patterns such as jumps between different blockchains or fragmentation of deposits. According to the Treasury Department, APIs and AI will assist in the creation of suspicious activity reports (SARs) to resolve the identities behind groups of previously anonymous digital wallets.
but, Ministry of Finance Also identify risks. This is because illegal actors can use generated AI to create deepfakes and advanced phishing. In fact, as CriptoNoticias reports, there is already evidence of AI-powered fraud.
In any case, there are other obstacles to using AI to prevent crimes using cryptocurrencies. Implementation challenges include the fact that small institutions in particular face high implementation costs, data quality issues, model bias, opacity, and even a lack of regulatory clarity.
For now, Ministry of Finance proposes guidelines for public-private collaboration and responsible use Evaluate the NIST AI Risk Management Framework, a voluntary guide developed by the National Institute of Standards and Technology, an agency of the U.S. Department of Commerce.
Ultimately, the Treasury Department has indicated that it will take concrete steps starting in 2026 to support financial institutions’ use of innovative tools, technologies, and strategies to combat illicit finance related to Bitcoin and other digital assets.
We conclude that these innovations are critical to maintaining U.S. financial leadership and enabling the legitimate growth of the digital asset sector while effectively deterring organized crime.
(Tag Translation) Anti-Money Laundering (AML)
