The U.S. Department of the Treasury recommends Congress authorize cryptocurrency platforms to freeze suspicious funds

2026-03-09 03:44:40

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Deep Tide TechFlow News, on March 9, according to Decrypt, the U.S. Department of the Treasury submitted a report to Congress recommending the creation of a “freezing law” for digital assets, allowing cryptocurrency platforms to temporarily freeze funds suspected of illegal activity. This proposal appears in an anti-money laundering technology report submitted under the US Stablecoin National Innovation Guidance and Establishment Act (GENIUS Act).

The proposal would create a legal safe harbor for financial institutions, allowing them to voluntarily temporarily freeze digital assets suspected of illegal activity during investigations, enabling platforms to halt suspicious transactions before funds are transferred or converted. Ari Redbord, Head of Policy and Government Affairs at TRM Labs, said this would provide a clear legal framework for platforms, giving law enforcement time to keep up with blockchain transaction speeds. Currently, exchanges can report suspicious activity, but legally freezing funds remains challenging.

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