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The US Treasury has launched a consultation on tackling illicit finance in crypto, and Illinois has introduced sweeping consumer protection laws, signalling growing federal–state momentum against digital asset fraud.
In a notice issued on August 18, 2025, the Treasury requested feedback on the use of “innovative or novel methods, techniques, or strategies to detect and mitigate illicit finance risks involving digital assets,” in keeping with its GENIUS Act obligations.
Under the terms of the GENIUS Act, which was signed into law by President Trump in July, the Secretary of the Treasury must consult the public on new means of detecting digital asset crime.
The Treasury highlighted improvements in financial institutions’ ability to detect illicit activity involving digital assets, the costs to regulated financial institutions and the amount and sensitivity of information reviewed as areas of particular interest.
It also specified privacy risks, operational challenges and efficiency considerations, cybersecurity risks and the effectiveness of mitigation techniques against illicit finance as policy areas it wanted to cover.
Instant traceability and enhanced security are among the advantages of blockchain technology that the Trump administration is seeking to exploit in the battle against illicit activity involving digital assets.
The deadline for comments is October 17, 2025.
Illinois crackdown
Alongside the federal-level activity on regulating digital assets, legislative moves were also made in Illinois to combat cryptocurrency fraud.
Also on August 18, Governor JB Pritzker signed two statutes into law: the Digital Assets and Consumer Protection Act (SB1797) and the Digital Asset Kiosk Act (SB 2319).
The Digital Assets and Consumer Protection Act establishes regulatory oversight of cryptocurrencies.
It requires companies in the digital asset sector to hold adequate financial resources to operate and to have procedures for addressing risks, including cybersecurity, fraud and money laundering.
The Digital Asset Kiosk Act creates specific protections against scams and fraud for consumers using digital asset kiosks.
Digital asset kiosk operators will have until July 1 2027 to register with the Illinois Department of Financial and Professional Regulation (IDFPR).
They will also have to deliver reports on all kiosk locations, and provide full refunds to new customers who are victims of scams at kiosks.
The act caps transaction fees at 18% and daily transaction amounts at $2,500 for new customers.
Governor Pritzker, a Democrat, said the legislation is a contrast to federal policies.
“While the Trump Administration is letting crypto bros write federal policy, Illinois is implementing common-sense protections for investors and consumers,” he said.
“At a time when fraudsters continue to evolve and consumer protections are being eroded at the federal level, Illinois is sending a clear message that we won’t tolerate taking advantage of our people and their hard-earned assets.”
According to the FBI, fraud cases involving cryptocurrency cost Illinois consumers $272m in 2024, making it the most common kind of financial fraud in the past year.
Outpacing digital asset fraudsters
Illinois’ legislation follows Wisconsin’s introduction of a suite of rules aimed at combatting crypto fraud.
As covered by Vixio, those regulations include daily transaction limits of $2,000 per customer, a requirement to affix conspicuous fraud warnings on machines and the obligation to adhere to anti-fraud procedures.
The various regulatory steps reflect an effort by federal and state governments to introduce legislative and regulatory safeguards preventing digital assets being misused.
Although the Trump administration is enthusiastic about the potential of digital assets to boost US economic performance, it is also conscious that digital asset fraud and scams have proliferated.
In addition to the risk to consumers, such scams may even pose a threat to US national security by providing a potential conduit for terrorism.
The challenge for US lawmakers at both federal and state levels will be finding a balance between anti-money laundering and counter-terrorism financing (AML/CTF) regulations and fostering the growth of the industry.
