TechFlow News, March 9: According to a report by Decrypt, the U.S. Department of the Treasury submitted a report to Congress recommending the creation of a “freeze law” targeting digital assets, which would permit cryptocurrency platforms to temporarily freeze funds suspected of involvement in illicit activities. This recommendation appears in an anti-money laundering (AML) technology report submitted under the “Generative Innovation and National Understanding of Stablecoins Act” (GENIUS Act).
The proposal would establish a legal safe harbor for financial institutions, enabling them to voluntarily and temporarily freeze digital assets suspected of illicit activity during investigations—allowing platforms to pause suspicious transactions before funds are transferred or converted. Ari Redbord, Global Head of Policy & Government Affairs at TRM Labs, stated that this would provide platforms with a clear legal framework, giving law enforcement time to keep pace with the speed of blockchain transactions. While exchanges can currently report suspicious activity, legally freezing funds remains challenging.
