US Treasury Advances GENIUS Act Rules Targeting Illicit Finance in Stablecoins

The US Treasury Department is moving forward with new regulations under the GENIUS Act, focusing on preventing illicit financial activity linked to payment stablecoins. The proposal introduces strict compliance requirements that could significantly reshape how stablecoin issuers operate within the United States financial system.

GENIUS Act Requires AML and Sanctions Compliance Programs

Under the proposed framework, payment stablecoin issuers must establish anti-money laundering (AML) and countering the financing of terrorism (CFT) programs. The rules also mandate the creation of sanctions compliance systems capable of identifying suspicious activity.

Issuers will be required to block, freeze, and reject certain transactions when necessary. Additionally, they will be treated as financial institutions under the Bank Secrecy Act (BSA), placing them under stricter regulatory oversight.

Stablecoin Issuers to Function as Bank-Like Gatekeepers

The rule was jointly issued by the Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC). Industry analysts suggest the move effectively turns stablecoin issuers into bank-like gatekeepers, enabling large-scale wallet freezes and asset seizures when compliance risks are identified.

The GENIUS Act, signed into law in July 2025, is expected to take full effect within 18 months or 120 days after related regulations are finalized.

Disclaimer

This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.