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U.S. Treasury Proposes 'Freeze Safe Harbor' for Digital Assets, Permitting Temporary Asset Freezing

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On March 8, 2026, the U.S. Treasury submitted a report to Congress under the GENIUS Act, proposing digital asset regulations that would require DeFi entities to assume AML/CFT responsibilities. The report introduced a "freeze safe harbor" mechanism, permitting institutions to temporarily freeze assets associated with suspicious activity without a court order. The proposal follows a rise in crypto-related crimes, with the FBI reporting $9 billion in crypto fraud losses in 2024. The framework seeks to balance compliance with the need for safe-haven assets in the digital economy.

ChainThink reports that on March 8, according to Alex Thorn, Head of Research at Galaxy Research, the U.S. Department of the Treasury submitted a report to Congress under the GENIUS Act, recommending that DeFi be explicitly required to fulfill AML/CFT obligations and considering the establishment of a "hold law" safe harbor for digital assets, allowing institutions to temporarily freeze assets during investigations of suspicious transactions without requiring a court order.


The report also reveals that the scale of crypto-related crime continues to grow, with the FBI recording $9 billion in crypto fraud losses in 2024.

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