1/ Last week, we submitted comments to @USTreasury in response to its request for input on innovative methods to detect illicit activity involving digital assets. Our message: effective oversight and innovation can coexist — if done right. 🧵

2/ We share Treasury’s goal of keeping bad actors out of crypto. In fact, many of our members are trusted partners of law enforcement — helping to identify and stop illicit activity beyond what’s required by law.

3/ But policymakers must start from the facts: illicit finance risks in digital assets are lower than in traditional finance. Blockchain’s transparency and traceability make detecting and disrupting illicit activity easier, not harder.

4/ We urge Treasury to adopt clear, tech-neutral rules that: -Respect the unique privacy implications of blockchain -Encourage innovation in AML solutions -Provide clarity through formal rulemaking, not enforcement

5/ On privacy: blockchain data is public and permanent. Linking personal identities to wallet addresses creates massive privacy and security risks — and even potential constitutional concerns under the Fourth Amendment.

6/ Digital asset companies are developing cutting-edge tools that protect both security and privacy: -Zero-knowledge proofs -On-chain AML screening -Smart contract-level compliance systems

7/ These innovations make AML compliance stronger while minimizing data collection risks. Treasury should encourage — not constrain — such approaches with flexible, principles-based rules.

8/ We also call for Treasury to finalize rules through notice-and-comment — not informal guidance or enforcement. Clear, durable rules will give U.S. innovators the confidence to build here instead of overseas.