[EDRM Editor’s Note: This article was first published here on July 20, 2025, and EDRM is grateful to Rob Robinson, editor and managing director of Trusted Partner ComplexDiscovery, for permission to republish.]
ComplexDiscovery Editor’s Note: President Trump’s signing of the GENIUS Act sets a new course for professionals in eDiscovery, cybersecurity, and information governance. By formalizing federal oversight of stablecoins—requiring one-to-one reserve backing, comprehensive AML/KYC compliance, and technical capabilities to freeze or seize tokens under court order—the Act introduces compliance obligations that reach deep into how digital financial records are governed, preserved, and reviewed. With federal banking agencies having 180 days to report implementation plans to Congress and a three-year safe harbor for existing platforms, legal teams can expect to navigate a growing volume of blockchain-based evidence, immutable, decentralized, and often beyond the reach of traditional systems. This new regulatory environment calls for readiness, strategy, and specialized tools as financial institutions and service providers adjust to the demands of digital asset oversight.
When President Donald Trump signed the GENIUS Act into law on July 18, 2025, he set in motion a regulatory framework that is expected to reshape how legal discovery and information governance professionals address the evolving nature of digital financial records. The formal alignment of traditional legal and regulatory principles with blockchain-based technologies has now been established through federal legislation.
The Guiding and Establishing National Innovation for U.S. Stablecoins Act represents more than cryptocurrency regulation. It introduces a structured national framework through which digital assets—specifically payment stablecoins—may be issued and used. These stablecoins are digital currencies designed to maintain a consistent value by being backed by traditional assets such as U.S. dollars and Treasury securities.
Under the Act’s provisions, only “permitted payment stablecoin issuers” may offer these digital currencies within the United States, establishing a licensing system that incorporates both federal and state oversight. The law removes compliant stablecoins from the jurisdiction of the Securities and Exchange Commission under most circumstances and instead places them under the purview of banking regulators. Issuers are thereby treated as financial institutions subject to existing compliance laws, including the Bank Secrecy Act.
This regulatory realignment carries implications extending beyond the cryptocurrency sector. The Act mandates that stablecoin issuers maintain full reserve backing on a one-to-one basis using approved liquid assets, operate under comprehensive anti-money laundering programs, and conduct extensive Know Your Customer verification procedures. These obligations will result in new categories of electronically stored information that are likely to appear in litigation, investigations, and audits.
The compliance infrastructure required by the GENIUS Act creates an extensive digital audit trail.
Rob Robinson, Editor and Managing Director, ComplexDiscovery.
The compliance infrastructure required by the GENIUS Act creates an extensive digital audit trail. This includes monthly reserve attestations validated by registered accounting firms, transaction monitoring systems, sanctions screening logs, and executive certifications. Each of these may qualify as discoverable business records. In cases involving stablecoin disputes, legal teams will encounter not only conventional financial documentation but also blockchain transaction records that persist permanently within decentralized networks.
This intersection of regulatory compliance and distributed ledger technology introduces specific challenges for information governance. Blockchain data differs from data stored in conventional relational databases—it is decentralized, often pseudonymous, and not readily filtered or queried using standard enterprise tools. Professionals will need access to specialized analytics platforms capable of interpreting blockchain transactions, mapping wallet activity, and identifying links between on-chain behavior and real-world entities. While the immutability of blockchain records offers advantages for verification and chain of custody, it also presents complications for traditional review processes predicated on centralized data storage.
The Act’s implementation schedule introduces a defined timeline. Federal banking agencies must submit reports to Congress within 180 days describing their planned regulations, with final rules due within one year. The legislation becomes effective on the earlier of 18 months after signing or 120 days following publication of final rules. Consequently, the compliance requirements may begin to take effect as early as late 2025. Digital asset service providers are granted a three-year safe harbor period to adjust operations.
For legal discovery and information governance professionals, the GENIUS Act highlights the need for near-term strategic planning. Organizations should evaluate their involvement in digital asset transactions, revise data retention and preservation policies to include blockchain-related evidence, and identify qualified service providers capable of offering compliance and forensic analytics solutions. As traditional financial institutions accelerate their entry into the stablecoin market, blockchain-related litigation is expected to increase.
Organizations should evaluate their involvement in digital asset transactions, revise data retention and preservation policies to include blockchain-related evidence, and identify qualified service providers capable of offering compliance and forensic analytics solutions.
Rob Robinson, Editor and Managing Director, ComplexDiscovery.
The Act’s reach beyond U.S. borders introduces further complexity. Foreign stablecoin issuers that serve U.S. customers must comply with American regulatory obligations. This creates potential cross-jurisdictional challenges during discovery, particularly where varying data protection laws govern access to relevant records. Legal teams will be required to reconcile regulatory requirements across multiple legal frameworks while ensuring defensible evidence collection.
The Act also mandates that permitted issuers possess the technical capabilities to “seize, freeze, burn, or prevent the transfer” of digital assets when legally required. This introduces new categories of technical documentation and operational logs that may become central to evidentiary requests in litigation. These logs could influence how courts address injunctive and remedial actions in the context of digital assets.
In the wake of the Act’s passage, legal professionals must adapt to an environment where blockchain analytics becomes an integrated component of discovery practice. The GENIUS Act redefines expectations for the governance, retrieval, and admissibility of financial data—integrating immutable blockchain technology into legal processes traditionally designed for more conventional forms of recordkeeping.
Read the original article here.
About ComplexDiscovery OÜ
ComplexDiscovery OÜ is a highly recognized digital publication providing insights into cybersecurity, information governance, and eDiscovery. Based in Estonia, ComplexDiscovery OÜ delivers nuanced analyses of global trends, technology advancements, and the legal technology sector, connecting intricate issues with the broader narrative of international business and current events. Learn more at ComplexDiscovery.com.
News Sources
- The President Signed into Law S. 1582 (The White House)
- S.1582 – 119th Congress (2025-2026): GENIUS Act (Congress.gov)
- US Establishes First Federal Regulatory Framework for Stablecoins: The GENIUS Act Passes Congress and Awaits President Trump’s Signature (Skadden)
- What the GENIUS Act Means for Payment Stablecoin Issuers, Banks, and Custodians (WilmerHale)
- What the GENIUS and CLARITY Act Bills Really Mean for Crypto Compliance (Chainalysis)
Additional Reading
- European Commission Unveils General-Purpose AI Code of Practice Ahead of AI Act Enforcement
- Strategic AI and the Shifting Role of IT in Enterprise Innovation
- BRICS Pushes for UN-Led AI Governance at Rio Summit
- Model Poisoning and Malware: GenAI’s Double-Edged Sword
- Legal Tech in the Loop: Generative AI and the New Frontiers of Responsibility
Source: ComplexDiscovery OÜ
Assisted by GAI and LLM Technologies per EDRM GAI and LLM Policy.
