Does decentralized finance live its last hours of freedom in the United States? Since July, the Crypto industry has been at the center of a vast regulatory project managed by the American Treasury. The objective? End the anonymity of transactions on DEFI platforms, in the name of the fight against money laundering and the financing of terrorism. But by imposing digital identity systems, do the authorities risk sacrificing the confidentiality and the very essence of the DEFI? The debate is launched.
In short
- The US Treasury wants to integrate KYC into the Defi Protocols Contracts.
- The official objective is to counter the financing of terrorism and money laundering.
- Tools like AI or API will also be asked to strengthen controls.
- The project is in public consultation until October 17, 2025 with Crypto actors.
The US Treasury wants to code compliance in smart contracts
As part of the Genius Act, signed in July by Donald Trump, the US Treasury launched a public consultation which could upset decentralized finance. It proposes to insert mechanisms of identity verification directly in smart contracts. Yes, you read that right.
Concretely, this means that any user may have to prove their identity before validating a transaction. And this, thanks to “portable digital identifiers” integrated into the code.
According to the official notice:
These tools may include identity documents issued by the government or biometric data. They are designed to support various aspects of AML/CFT compliance and maximize user confidentiality while reducing the charges of compliance for financial institutions.
Banks applaud, crypto purists would cringe. For them, this KYC Codée obligation could sound the end of anonymity on protocols.
United States and Crypto: to a new surveillance pact?
The treasure does not stop there. In the same call for comments, four technologies are mentioned: artificial intelligence, surveillance APIs, blockchain analysis and of course, digital identity.
Why this turn? Because the crypto market represents a huge deposit … of risks too. The treasure cites money laundering, bypassing sanctions, ransomware.
And for the first time, the authorities want these tools to be native, integrated into Crypto infrastructure.
In the press release:
The Treasury recognizes that these innovative tools can result in costs related to their acquisition and the expertise necessary to integrate them effectively. Their still experimental nature represents a challenge, in particular in the first phases of their deployment.
Clearly, the United States seeks to code regulation in the defi itself. The message is clear: technology should no longer bypass the law. And anonymity becomes a privilege to review.
Crypto-sphere facing the United States Compressor Roll
The Crypto community does not hide its concern. On X, critical voices are increasing. Some are alarmed by a dangerous precedent: if the US impose universal KYC in the DEFI, other countries will follow. Others see it as a brake on innovation and a weakening of personal data protection.
On the banks side, the atmosphere is quite different. The Bank Policy Institute (BPI), bringing together several major institutions, warned the congress against a flaw of the Genius Act. According to them, some stablecoins issuers could bypass the ban on paying interest.
Zoom on figures and facts:
- The BPI estimates that up to $ 6,600 billion in bank deposits could migrate to Stablecoins;
- The Treasury launched its public consultation on August 18, 2025;
- The comments are open until October 17, 2025;
- Four targeted tools: API, AI, Blockchain surveillance, digital identity;
- The proposal concerns all platforms providing defi services in the United States.
This project marks a break. The American approach consists in bringing the DEFI into the regulatory perimeter by technology. And it changes everything.
Senator Elizabeth Warren has not cheated her words: this plan weakens transparency instead of strengthening it. For her, the Genius Act risks legitimizing opaque practices, under the guise of innovation. One thing is certain: the United States no longer wants a decentralized finance outside control. It remains to be seen if the rest of the world will follow.
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