On March 9, the U.S. Department of the Treasury announced that it is conducting research under the GENIUS Act, focusing on detecting illegal activities involving digital assets and proposing new measures to combat cryptocurrency crimes. By reviewing industry feedback and examining AI, digital identity, blockchain analysis, and API technologies, the department found that the risks associated with mixer abuse, decentralized finance (DeFi) platforms, and non-custodial wallets are increasingly prominent.
The report states that stablecoins account for up to 84% of illegal crypto transactions, making them a regulatory focus. To address these risks, the Treasury recommends using AI-driven real-time blockchain monitoring tools and subjecting major stablecoin issuers to stricter financial compliance systems. Alex Thorn, head of Galaxy Research, emphasized that strengthening regulation will help reduce the spread of digital asset crimes.
The report also reveals that North Korean hacking groups have stolen approximately $2.8 billion in crypto assets over the past two years, with a single loss reaching $1.5 billion in early 2025. These funds may be used to support North Korea’s weapons programs, highlighting the ongoing escalation of state-sponsored cyber threats. Meanwhile, global cyber scams and sanctions evasion activities are also rapidly increasing. Chainalysis data shows that sanctioned entities transferred about $104 billion via cryptocurrencies in 2025, a 694% increase year-over-year.
The U.S. Department of the Treasury states that these findings will drive updates to the regulatory framework and are closely related to the proposed CLARITY Act. The CLARITY Act aims to provide clearer regulatory guidance for digital assets without mandating their integration into traditional banking systems, thereby enhancing compliance transparency.
Overall, the Treasury’s strengthened regulation and blockchain monitoring efforts aim to reduce stablecoin misuse and cross-border crime risks, while providing a safer environment for investors. In the future, with the implementation of AI technologies and on-chain analysis tools, regulators are expected to more effectively address crimes in the cryptocurrency space and threats supported by nation-states.
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