Overview
- A House Financial Services subcommittee heard testimony on Thursday about modernizing the 1970 Bank Secrecy Act to address AI-enabled scams and rapid crypto thefts.
- Critics say the current system produces massive paperwork: financial firms filed about 28.7 million BSA reports in FY2025 while one researcher estimated roughly 275 IRS criminal probes came from those reports.
- TRM Labs’ Ari Redbord testified that the BSA is "structurally incapable" of keeping pace with criminals who move funds across wallets in 24 to 48 hours and urged formal recognition of crypto intelligence units and a legal safe harbor to let exchanges freeze suspect funds.
- President Trump signed an executive order days before the hearing directing regulators to tighten customer due-diligence rules with new focus on immigration-linked account risks, a step that raises civil-liberty and enforcement concerns.
- Regulators have circulated proposed rules and lawmakers are considering bills such as the STREAMLINE Act to raise outdated reporting thresholds and move to risk-based oversight, a shift that could reduce routine filings for ordinary customers and reshape how banks and investigators share actionable leads.