the CODE Act of 2025

This bill, known as the CODE Act of 2025, mandates the Secretary of the Treasury to establish a public-private partnership program within six months of enactment. This program, developed in consultation with various agencies including FinCEN and the FBI, aims to examine innovative anti-money laundering (AML) solutions for decentralized finance services (DeFi). Its core focus is on integrating AML, identity verification, sanctions, and cybersecurity controls directly into decentralized smart contracts before their deployment on public blockchain networks. The partnership will test the capabilities of these integrated controls, consider establishing regulatory gateways for verifiable data inputs, and provide legislative and regulatory recommendations. DeFi services owned or controlled by certain government officials or their families are prohibited from participating. The program will sunset after 18 months, by which time FinCEN must also publish an advisory on the responsible development and operation of DeFi services to strengthen Bank Secrecy Act compliance. Finally, within 30 months, the Secretary of the Treasury is required to issue a rule defining DeFi terms and mandating that DeFi services implement and maintain risk-based AML and sanctions compliance programs.