The post Galaxy Warns Senate Crypto Bill Expands Treasury Surveillance Powers appeared on BitcoinEthereumNews.com.

Galaxy Digital warned that a draft crypto market structure bill released by the US Senate Banking Committee would hand the Treasury Department sweeping new surveillance and enforcement tools, describing it as the biggest expansion of financial oversight authority since the US Patriot Act. In a research note published Tuesday, Galaxy said the Senate proposal goes far beyond the House-passed CLARITY Act, particularly on illicit finance provisions. At the center of Galaxy’s warning is a new crypto-specific “special measures” authority. The authority would allow the Treasury to designate foreign jurisdictions, financial institutions or entire classes of digital asset transactions as primary money-laundering concerns, giving it the power to restrict or condition certain crypto fund transfers. Galaxy compared this to tools created under the Patriot Act, noting that it could be applied broadly across offshore venues and transaction rails. The Patriot Act is a law passed after the 9/11 attacks to enhance national security by expanding government surveillance powers, giving law enforcement new tools like easier wiretapping and tracking digital communications to combat terrorism. The law has faced significant controversy over civil liberties. Related: Charles Hoskinson doubts CLARITY Act timeline, says Trump crypto czar should quit Senate crypto bill adds transaction freeze powers The draft crypto market structure bill also introduces a formal “temporary hold” framework for digital asset transactions. Under this mechanism, Treasury or other covered agencies could request that stablecoin issuers and digital asset service providers freeze transactions for up to 30 days, with possible extensions, without first obtaining a court order. Another key provision explicitly pulls crypto front ends into sanctions and Anti-Money Laundering compliance. The bill defines “distributed ledger application layers,” such as web-hosted interfaces used to interact with blockchains or decentralized finance (DeFi) protocols, and directs Treasury to issue guidance requiring these tools to screen wallets, block…

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Filed under: News - @ January 14, 2026 11:26 pm