The US Treasury Department has urged financial institutions and digital-asset service providers to expand the use of artificial intelligence, digital identity tools and blockchain analytics to detect illicit activity in crypto markets, according to a report to Congress.
US Treasury Urges Banks, Crypto Firms to Deploy AI Tools to Fight Illicit Finance
9 March 2026 - 14:56 CET
By Sandmark staff
The report, produced under the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, outlines how emerging technologies could strengthen anti-money-laundering (AML) and sanctions compliance as the digital asset ecosystem grows.
"Investments by industry in innovative tools such as artificial intelligence, digital identity, blockchain analytics, and APIs can produce positive, long-term results for the fight against financial crime," the Treasury report said.
The department said it would encourage financial institutions to adopt such technologies and work with regulators and industry to promote innovation in compliance tools.
The report comes amid increased scrutiny of crypto compliance. As Sandmark reported, US Senate Democrats recently asked the Treasury and the Department of Justice to examine whether exchange operator Binance is complying with sanctions and anti-money-laundering obligations.
Fraud losses highlight risksThe Treasury report said digital assets continue to play an increasing role in illicit finance schemes, even as they support legitimate activities such as payments and investment.
Victims reported more than $9bn in digital asset-related fraud losses to the FBI's Internet Crime Complaint Center in 2024, including about $5.8bn linked to investment scams, the report said.
Threat actors ranging from ransomware groups to transnational criminal organisations and North Korean hackers have also used digital assets to move illicit funds, the department said.
North Korea alone stole at least $2.8bn in digital assets between January 2024 and September 2025, according to the report.
Stablecoins and new compliance toolsThe Treasury also highlighted the growing role of stablecoins and blockchain infrastructure in laundering processes.
Criminals often move stolen tokens through mixing services before converting them into stablecoins and transferring the funds through new wallets or cross-chain bridges to obscure their origin, the report said.
To counter these risks, the department said it plans to issue guidance encouraging financial institutions to integrate AI tools into AML programmes and explore the use of verifiable digital credentials for customer identification.
"Treasury will issue guidance, statements of support, or FAQs to further encourage financial institutions to leverage AI as part of risk-based AML/CFT policies," the report said.
The department added it would work with other agencies and international partners to develop technical standards and promote the use of new compliance technologies across the financial system.
