Anti-money laundering innovation
Public comment
Beginning on the date that is 30 days after
application program interfaces;
artificial intelligence;
digital identify verification; and
use of blockchain technology and monitoring.
Treasury research
In general
Research factors
With respect to each innovative or novel method, technique, or strategy described in paragraph (1), the Financial Crimes Enforcement Network shall evaluate and consider the following factors against existing methods, techniques, or strategies:
Improvements in the ability of financial institutions to detect illicit activity involving digital assets.
Costs to regulated financial institutions.
The amount and sensitivity of information that is collected or reviewed.
Privacy risks associated with the information that is collected or reviewed.
Operational challenges and efficiency considerations.
Cybersecurity risks.
Effectiveness of methods, techniques, or strategies at mitigating illicit finance.
Treasury risk assessment
As part of the national strategy for combating terrorist and other illicit financing required under sections 261 and 262 of the Countering America’s Adversaries Through Sanctions Act (Public Law 115–44; 131 Stat. 934), the Secretary of the Treasury shall consider—
the source of illicit activity, such as money laundering and sanctions evasion involving digital assets;
the effectiveness of and gaps in existing methods, techniques, and strategies used by regulated financial institutions in detecting illicit activity, such as money laundering, involving digital assets;
the impact of existing regulatory frameworks on the use and development of innovative methods, techniques, or strategies by regulated financial institutions; and
any foreign jurisdictions that pose a high risk of facilitating illicit activity through the use of digital assets to obtain fiat currency.
FinCEN guidance or rulemaking
Not later than 3 years after
The implementation of innovative or novel methods, techniques, or strategies by regulated financial institutions to detect illicit activity involving digital assets.
Standards for payment stablecoin issuers to identify and report illicit activity involving the payment stablecoin of a permitted payment stablecoin issuer, including, fraud, cybercrime, money laundering, financing of terrorism, sanctions evasion, or insider trading.
Standards for payment stablecoin issuers’ systems and practices to monitor transactions on blockchains, digital asset mixing services, tumblers, or other similar services that mix payment stablecoins in such a way as to make such transaction or the identity of the transaction parties less identifiable.
Tailored risk management standards for financial institutions interacting with decentralized finance protocols.
Recommendations and report to Congress
In general
Not later than 180 days after
legislative and regulatory proposals to allow regulated financial institutions to develop and implement novel and innovative methods, techniques, or strategies to detect illicit activity, such as money laundering and sanctions evasion, involving digital assets;
the results of the research and risk assessments conducted pursuant to this section;
efforts to support the ability of financial institutions to implement novel and innovative methods, techniques, or strategies to detect illicit activity, such as money laundering and sanctions evasion, involving digital assets;
the extent to which transactions on distributed ledgers, digital asset mixing services, tumblers, or other similar services that mix payment stablecoins in such a way as to make such transaction or the identity of the transaction parties less identifiable may facilitate illicit activity; and
legislative recommendations relating to the scope of the term “digital asset service provider” and the application of that term to decentralized finance.