The U.S. Treasury is soliciting public comment on innovative methods to identify and mitigate illicit cryptocurrency activities, as part of fulfilling the GENIUS Act. The focus areas include AI, blockchain monitoring, digital ID verification, and application program interfaces (APIs). Responses are due by October 17, which will help shape future crypto regulations. Industry experts suggest that compliance and privacy can coexist through technologies like zero-knowledge proofs (ZK proofs) and reusable KYC credentials. These approaches minimize the risk of exposing personal data while maintaining necessary regulatory compliance. The feedback will inform a report to the Senate and House committees, leading to potential legislative proposals. Professionals in the industry, such as Katie Evans from Swarm and Harry Halpin from Nym, emphasize the importance of privacy-preserving solutions that can coexist with effective compliance strategies. Overall, respondents hope to achieve a balanced approach that supports the growth of DeFi while ensuring protection against illicit activities.

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