Digital Assets Are the Main Focus of New Safe Harbor from the United States, Allowing Temporary Freezing for Investigations

Digital assets are the latest focus in U.S. government regulation strategies. Last week, the U.S. Department of the Treasury submitted ambitious recommendations to Congress that change how agencies can handle digital assets in suspicious transaction investigations. According to Alex Thorn from Galaxy Research, this report based on the GENIUS Act opens the door to a legal “safe harbor” mechanism never before seen.

Temporary Freeze Mechanism: Responding to Illegal Activities

The proposal is not simple. The U.S. Department of the Treasury recommends establishing a system that allows financial institutions to temporarily hold digital assets without requiring formal court orders. This mechanism is specifically designed for the period of investigating suspicious transactions—giving regulators valuable time to conduct in-depth audits.

The key to this proposal is legal protection called “safe harbor.” This means that institutions acting according to the established procedures will be protected from legal action. It reflects the government’s effort to balance financial system security with protecting the rights of institutions acting in good faith.

DeFi Must Take Responsibility for Anti-Money Laundering

The report also emphasizes that the DeFi (decentralized finance) sector can no longer operate in regulatory gray areas. The recommendations explicitly state that DeFi must clearly assume AML/CFT obligations—Anti-Money Laundering and Countering the Financing of Terrorism programs. This is a significant extension of the regulatory commitments already applied to centralized platforms.

Why is DeFi a particular target? Because its decentralized nature makes it difficult to monitor, DeFi platforms are often chosen routes for illegal activities. By establishing clear AML/CFT responsibilities, the government aims to reduce the misuse of blockchain ecosystems for suspicious purposes.

Crypto Crime Continues to Hit New Records

The data underlying this proposal is quite concerning. The FBI reports that in 2024, losses from digital asset-related scams reached $9 billion. This figure shows that despite ongoing blockchain technology development, financial security threats are also evolving.

The scale of this crime is not just about numbers—it’s about public trust in the digital financial system. Each major scam incident reduces mainstream adoption of digital assets and damages the reputation of the legitimate crypto industry.

Long-Term Implications for the Industry

The U.S. Department of the Treasury’s proposal marks a turning point in how digital assets will be treated in the future. By integrating safe harbor mechanisms and strengthening AML/CFT requirements for DeFi, the government is creating a more structured but tighter framework.

For investors and developers, this means more compliance responsibilities but also greater legal certainty. Digital assets are becoming an increasingly integral part of the global financial system, and with that comes the need for proportional and effective oversight.