The American Fintech Council (AFC) has submitted a comment letter to the U.S. Department of the Treasury, urging federal action to support secure data sharing and responsible use of artificial intelligence (AI) in efforts to detect and prevent illicit financial activities involving digital assets.
Phil Goldfeder, CEO of the AFC, stated, "The unimpeded movement of data underpins all aspects of the modern financial services industry, especially in combatting illicit activities in the digital assets space. Criminals conducting illicit activities take advantage of gaps in the regulatory framework, especially regarding the movement of data, to harm consumers and fund nefarious operations. Therefore, Treasury and the prudential banking regulators must use all available policy levers to ensure the flow of data used to combat these illicit activities remains unimpeded."
The AFC emphasized that regulatory efforts should not restrict consumer-permissioned data necessary for identifying and preventing illicit activity within digital assets. The council also called for coordination with banking regulators to clarify that federal law overrides state privacy laws that could impede fraud detection efforts. The AFC further encouraged the Treasury to broaden its use of supervisory technology (suptech) tools and promote partnerships with industry stakeholders to incentivize AI-driven compliance solutions.
Ian P. Moloney, AFC’s Senior Vice President and Head of Policy and Regulatory Affairs, said, "Leveraging AI technology to combat illicit activities in the digital assets space is crucial to meeting the Administration’s goals for improving the financial services ecosystem. By promoting the responsible adoption of AI in regtech and suptech tools, Treasury can strengthen both oversight and operational resilience across the financial services industry."
The AFC’s recommendations focus on federal leadership to encourage collaboration between government and industry in countering threats within digital assets. The organization represents major fintech companies and innovative banks, with a mission to foster a transparent, inclusive, and customer-focused financial system by supporting responsible innovation and sound public policy. AFC members work to increase competition in consumer finance and develop products aimed at underserved markets.