In brief
- The Treasury has recommended a “hold law” allowing platforms to pause suspicious crypto transfers during investigations.
- The proposal appears in a GENIUS Act report on tools to counter illicit finance involving digital assets.
- The idea could help law enforcement react faster, though legal and transparency questions remain, Decrypt was told.
The U.S. Treasury is urging Congress to consider creating a digital asset-specific “hold law” that would allow crypto platforms to temporarily freeze funds linked to suspected illegal activity.
The recommendation has appeared in a Treasury report to Congress on technologies used to counter illicit finance involving digital assets, produced under the Guiding and Establishing National Innovation for U.S. Stablecoins, or GENIUS Act.
“Lawful users of digital assets may leverage mixers to enable financial privacy when transacting through public blockchains,” the report reads, adding that a measure for the hold law would create a legal safe harbor allowing financial institutions to “temporarily and voluntarily hold digital assets involved in suspected illegal activity” during an investigation.
The authority could allow institutions to pause suspicious transfers before funds are moved or converted through other crypto…
