Wyoming Launches Stablecoin; US Bank Enables Blockchain-Based Payments
By Robert A. Musiala Jr.
On Aug. 19, Wyoming became the first U.S. state to issue its own stablecoin, the Frontier Stable Token (FRNT). According to reports, a state-created entity, the Wyoming Stable Token Commission, holds U.S. dollars and short-term U.S. Treasury bills to ensure each FRNT unit is backed 1:1 by USD equivalent reserves. According to the Wyoming Stable Token Commission website, FRNT has been deployed on seven blockchains: Arbitrum, Avalanche, Base, Ethereum, Optimism, Polygon and Solana. The website further notes that the Wyoming Stable Token Commission does not anticipate selling FRNT directly to the public. Instead, “FRNT will be available for purchase through a network of authorized resellers that complete a robust ‘Know Your Business’ review by the Commission.”
In another recent development, a U.S. bank recently announced that it “will be one of the first US-banks to offer a blockchain-powered remittances service.” According to a press release, the bank will partner with Lightspark, “a leading enterprise infrastructure provider that uses Bitcoin.” According to the press release, the bank will leverage Lightspark’s Universal Money Address platform to enable customers to send funds abroad directly from the bank’s app with lower fees and faster delivery compared to traditional remittance service providers.
In a final notable development, several recent reports offer new data on stablecoins and cryptocurrencies. Among other findings, a report by a major U.S. cryptocurrency exchange suggests the stablecoin market cap could reach US$1.2 trillion by the end of 2028. Another report on stablecoins explores stablecoin use cases and analyzes how stablecoins are “transforming business” and “disrupting commerce.” Finally, a report by a blockchain analytics company provides new data on the growing use of cryptocurrency in Latin America.
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Treasury Dept. Issues Request for Public Comment on GENIUS Act
By Robert A. Musiala Jr.
On Aug. 18, the U.S. Department of the Treasury (Treasury) issued an official request for comment related to the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act. According to a Treasury press release, the request for comment “offers the opportunity for interested individuals and organizations to provide feedback on innovative or novel methods, techniques, or strategies that regulated financial institutions use, or could potentially use, to detect illicit activity involving digital assets.” According to the press release, Treasury is specifically seeking comments “about application program interfaces, artificial intelligence, digital identity verification, and use of blockchain technology and monitoring.” Treasury will use the public comments received “to inform research on the effectiveness, costs, privacy and cybersecurity risks, and other considerations related to these tools.” Comments must be received on or before Oct. 17.
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Central Bank Ends Novel Activities Program; Illinois Enacts Digital Assets Laws
By John Robertson
In an Aug. 15 press release, the board of the U.S. central bank announced it will end its novel activities supervision program and return to monitoring certain bank activities through the normal supervisory process. The novel activities covered by the program were (1) complex, technology-driven partnerships with nonbanks providing banking services; (2) crypto-asset-related activities; (3) projects that used distributed ledger technologies; and (4) banks concentrated on providing services to crypto-asset-related entities. The release states the action is a result of the board strengthening its understanding of the topics such that they could now be integrated into the standard supervisory process. The board has also withdrawn its 2023 supervisory letter (SR 23-7), which created the novel activities program.
In a separate development, on Aug. 18, the Governor of Illinois signed into law two bills governing the digital assets industry in the state. According to a press release, the first bill, the Digital Assets and Consumer Protection Act, grants the Illinois state financial regulator authority to “regulate and supervise digital asset exchanges and other digital asset businesses” and “creates strong customer protections in line with those that currently apply to traditional financial services, such as investment disclosures, customer asset safeguards, and customer service standards.” The press release notes that the second bill, the Digital Asset Kiosk Act, places new requirements on digital asset kiosk operators, including requirements to register with the Illinois financial regulator, provide reports listing kiosk locations, provide full refunds to customers who are victims of scams, cap transaction fees at 18%, and cap daily transaction amounts at $2,500 for new customers. According to the press release, “[c]ertain consumer protections included in the legislation (such as the refunds for victims of fraud and scams) take effect immediately” and digital asset businesses in Illinois will have until July 1, 2027, to register.
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US Government Targets Russian-Operated Cryptocurrency Exchange
By Amos Kim
The U.S. government has taken coordinated action against Garantex, a Russian-operated cryptocurrency exchange. The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has re-designated Garantex for processing over $100 million in transactions linked to illicit actors, including ransomware groups and darknet markets. According to a press release, this action was taken in part because Garantex developed infrastructure intended to prevent financial institutions from attributing wallet addresses back to the exchange. OFAC also designated another cryptocurrency exchange created by Garantex employees to support the company’s sanctions evasion efforts. As part of the action, multiple digital asset public keys were added to OFAC’s Specially Designated Nationals List.
In a parallel action, the U.S. Department of State announced two rewards under its Transnational Organized Crime Rewards Program totaling up to $6 million. One reward offers up to $5 million for information leading to the arrest and/or conviction of a Russian national, and a second reward of up to $1 million is offered for information on other key leaders. According to a press release, between April 2019 and March 2025, Garantex processed at least $96 billion in cryptocurrency transactions. The release notes that the exchange was allegedly used to facilitate various crimes, including hacking, ransomware and drug trafficking, often with substantial harm to U.S. victims.
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New Organization to Flag Illicit Cryptocurrency Addresses, BIS Publishes Approach to Cryptocurrency AML
By Keith R. Murphy
In a recent press release TRM Labs, a blockchain intelligence platform, announced the launch of the Beacon Network, “the first real-time cryptocurrency response network.” As noted in the release, the platform was built through industry collaboration with multiple well-known exchanges, stablecoin issuers and law enforcement agencies to help prevent illicit funds from exiting the blockchain. Law enforcement agencies around the world are actively contributing to the Beacon Network by flagging addresses tied to critical threats and triggering alerts in an effort to prevent bad actors from cashing out, according to the release. According to TRM Labs, since 2023 at least $47 billion in cryptocurrency has been sent to fraud-related addresses.
In a separate development, the Bank for International Settlements (BIS) recently issued a bulletin titled “An approach to anti-money laundering compliance for cryptoassets.” Among other things, the bulletin advocates for “an alternative approach to AML compliance in permissionless blockchains” in which “[a]n AML compliance score based on the likelihood that a particular cryptoasset unit or balance is linked with illicit activity may be referenced at points of contact with the banking system (‘off-ramps’), preventing inflows of the proceeds of illicit activity and supporting a culture of ‘duty of care’ among cryptocurrency market participants.” For more information, please refer to the following links:
US and Canada Announce Cryptocurrency Seizures, Coordinated Efforts
By Amos Kim
The U.S. Department of Justice (DOJ) recently announced the seizure of over $2.8 million in cryptocurrency, along with $70,000 in cash and a luxury vehicle. According to a DOJ press release, the assets are alleged to be the proceeds of Zeppelin ransomware activity. The seizure coincides with reports of enhanced collaboration between U.S. and Canadian authorities to combat cryptocurrency-related crime. A recent initiative led by the Ontario Provincial Police has reportedly uncovered over $74 million in combined losses from various crypto-related scams as part of a broader public-private partnership called Operation Spincaster. Another recent effort, Operation Avalanche, led by the BC Securities Commission, focused specifically on scams occurring on the Ethereum blockchain and identified over $4.3 million in losses tied to fraud schemes.
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