Authored by Micah Zimmermann via BitcoinMagazine.com,
The Federal Reserve proposed Thursday that payment stablecoin issuers maintain written customer identification programs, a move that signals Washington’s determination to bring digital asset markets under the same anti-money laundering discipline long applied to traditional banks — even as regulators race to finalize rules before a statutory deadline this coming January.
The proposal would require so-called permitted payment stablecoin issuers, or PPSIs, to collect from each new customer a legal name, date of birth or formation, physical address, and a government-issued identification number before opening an account.
The Federal Reserve framework mirrors CIP obligations that banks, broker-dealers, mutual funds, and futures commission merchants have operated under for more than two decades. Regulators will take public feedback on the proposal for 60 days.
The Federal Reserve’s action follows a wave of rulemaking set in motion by the Genius Act — formally, the Guiding and Establishing National Innovation for U.S. Stablecoins Act — which President Trump signed into law in July 2025.
That landmark legislation created the first federal regulatory system for stablecoins, mandating 100% reserve backing with liquid assets and subjecting issuers to the Bank Secrecy Act for the first time.
The statute requires stablecoin issuers to establish effective anti-money laundering, sanctions compliance, and customer identification programs. The Genius Act becomes effective on the earlier of January 18, 2027, or 120 days after primary federal regulators issue their final implementing rules.
Federal Reserve Governor cautions towards stablecoinsFederal Reserve Governor Michael Barr has emerged as the most vocal voice of caution within the regulatory apparatus, even as his colleagues have embraced digital assets with new openness. Speaking in March at a Federalist Society conference in Washington, Barr warned that stablecoins face material risks around reserve asset quality, regulatory arbitrage, anti-money laundering gaps, and financial stability — concerns he argued the Genius Act’s primary text does not resolve on its own.
“While some digital asset service providers are subject to anti-money laundering and anti-terrorist financing requirements in their home jurisdiction, it is far too easy for bad actors to evade these restrictions and operate without detection when transacting in digital assets,” Barr said in a statement Thursday.
Barr, who previously served as the Federal Reserve’s top bank cop, contends that detailed rulemaking remains the critical instrument for translating the statute’s intent into enforceable protections.
Thursday’s proposal is the latest in a dense sequence of rulemakings from multiple agencies. In April 2026, the Treasury Department’s Financial Crimes Enforcement Network and the Office of Foreign Assets Control issued a joint proposed rule requiring PPSIs to adopt written AML and countering-the-financing-of-terrorism programs and a full sanctions compliance framework.
That rule would carve PPSIs out of the existing money services business category and treat them as a distinct class of BSA-covered financial institutions — a significant structural change, given FinCEN’s finding that roughly half of known stablecoin issuers have not registered as MSBs at all.
The FDIC and OCC each issued their own notices of proposed rulemaking in parallel, covering licensing, reserves, capital requirements, and redemption standards. The CIP proposal announced Thursday is a separate, complementary rulemaking to those AML and sanctions rules.
Stablecoin rules and nuanceThe proposed customer identification requirements carry technical nuance tailored to stablecoin markets. Unlike banks, a PPSI can face demands for direct redemption from token holders who acquired coins on the secondary market rather than through a direct issuance relationship.
The proposal addresses this by defining an “account” to include that redemption event, meaning an individual who acquires a stablecoin on an exchange and later redeems it directly with the issuer would trigger CIP obligations at the moment of that interaction.
Purely secondary market transactions in which the PPSI is not a direct counterparty — including transfers conducted via smart contract — would not constitute an account relationship under the proposed framework.
The timeline for finalization is tight. With the Genius Act’s effective date potentially arriving as early as 120 days after the agencies publish their final rules, the window for comment, revision, and adoption is compressed. Final CIP rules are not expected before 2027, which means the statute could take effect before its customer identification architecture is fully in place.
Tyler Durden Thu, 06/18/2026 - 14:45Explosives and arson experts from the U.S. Bureau of Alcohol, Tobacco, and Firearms this week told a jury in the federal arson case against Jonathan Rinderknecht that fireworks could not have been the culprit.
The 29-year-old Rinderknecht is accused of starting a blaze in the Santa Monica Mountains, which investigators say led to the deadly Palisades Fire of 2025.
“Anyone who was in this area—if there was a firework launched, burning, or landing here—would have seen it. They’re bright, there’s a lot of color, a lot of flame, a lot of stars. And you would definitely hear it,” Kevin Miner, an explosives enforcement officer and unit chief at the agency’s training facility in Huntsville, Alabama, told the court.
“It’s 140 decibels of sound—that’s more than twice what it takes to harm the human ear.”
Miner said he based his findings on video surveillance footage, witness testimony, and analysis of sound profiles, topography, and weather conditions.
As Beige Luciano-Adams reports for The Epoch Times, Rinderknecht is on trial for three federal counts of arson related to property damage sustained in the Pacific Palisades Fire, which killed 12 people and incinerated more than 6,000 homes in the eponymous coastal enclave.
The state argues the catastrophe was a “holdover” or continuation of the Lachman Fire, which investigators say Rinderknecht allegedly ignited with a Bic lighter just after midnight on New Year’s Eve 2024, driven by a desire for “revenge against society.”
Defense attorneys maintain the government has no “reliable evidence” showing that Rinderknecht started the Lachman Fire on Jan. 1, much less that he was responsible for a separate fire that began a week later on Jan. 7.
Rather, Rinderknecht’s defense team says he encountered a fire and called 911 to report it in good faith—and that a firework was the more likely cause.
ATF agents on Monday and Wednesday dismantled the firework origin theory with a methodical recounting of the evidence.
While in theory, an aerial firework could cause a blaze like the Lachman Fire, Miner acknowledged under cross-examination that the specific conditions in the area and the fact that no witnesses—including, by his own account, the defendant—saw any fireworks, make it extremely unlikely.
Federal fire investigators also ruled out so-called “ground salutes” or ground-based fireworks, a malfunctioning or smoldering firework, or other potential causes like cigarettes, lightning, or powerlines.
Steve Haney, an attorney for Rinderknecht, sought to sow the seeds of reasonable doubt.
“For 10 days, everyone ignored a crime scene, didn’t they?” he asked Miner on cross-examination.
If the Jan. 1 Lachman Fire was an arson, then it was a crime scene—but it wasn’t preserved as such, Haney said, noting the area remained open to the public, planes dropped water and fire retardant on the burn scar, and a subsequent fire razed the area, potentially incinerating physical evidence.
“Isn’t it true that if there were evidence of fireworks, it would have been washed down the hill?” Haney asked. “And for at least nine days, no one went up there to look for fireworks materials?”
Miner ultimately agreed such was theoretically possible, but said the lack of physical evidence in this particular case was not a concern.
“I relied more on the sound profiles, and the video and witness statements. Frequently we have very little physical evidence of the fireworks after suppression, so it’s not uncommon for that to disappear.”
FireworksAttorneys for the state preempted the defense’s argument that witnesses, including nearby residents, heard what they thought were fireworks just before midnight that could have emanated from the origin area.
“There are a variety of statements—most in their homes, some said they heard a popping, and a couple people referred to bottle rockets, some to fireworks,” Miner said.
But, he said, any firework sounds they heard more likely than not would have come from below the neighborhood, given the fact that the homes are terraced into the mountainside, and the fire origin area is around 350 feet above it.
“It drops off significantly … Sound has a tendency to travel up,” he said.
Sound emanating from an aerial firework, Miner explained, is omnidirectional—“anything airborne will send sound and blast waves out in all directions.”
In the particular area where investigators believe the fire started, the sound would have traveled everywhere until it hit objects, clouds, hard land, or buildings to absorb or reflect it, Miner said.
“In calm weather like that, there’s nothing to mask the sound. Sound travels very quickly and easily through that medium.”
Something set off in the lower canyons below the homes, he explained, would bounce until it hit objects, clouds, or buildings to absorb it; something set off up higher would be less likely to be heard at all, as the sound energy would “escape into the atmosphere.”
One nearby resident, located around 0.2 miles and around 350 feet below the fire’s area of origin, reported his windows shaking before midnight.
But Miner said it was extremely unlikely he would’ve been the only one to experience this if it came from a firework above him.
“If that were to actually be caused by anything on the mountaintop, you would expect to see evidence in houses adjacent, maybe 200 to 300 feet away—broken glass, cameras askew,” Miner said.
“You can’t rattle a window 0.2 miles away without rattling everyone’s windows.”
A Burning BushInvestigators determined the fire was incendiary in nature—in this case, ignition of vegetation. They came to this conclusion based on a review of video surveillance, witness testimony, and the defendant’s own statements.
“The defendant admitted having a lighter with him up on Buddha Hill,” said Derek Hill, a fire analyst and recently retired Certified Fire Investigator with the ATF who worked the case, referring to the landing area where investigators believe the Lachman Fire started.
“He said he was alone on the hill. He identified where the fire started correctly—this was information that wasn’t public at the time.
“It gave us pause because he was recognizing the fire from a location we know he was at, but not when that fire would have been visible,” he said.
Investigators tracked Rinderknecht’s movements using geolocation data from nearby cellular towers, constructing a detailed timeline that they overlaid with one constructed from video surveillance footage.
All of this, Hill said, corroborated investigators’ work, including a meticulous mapping of fire pattern indicators, in which they looked at the fire’s impact on the environment to determine how and where it spread, and at what intensity.
Hill helped lead a team that included 11 federal Certified Fire Investigators and five wildland investigators. Arriving on the scene of the Palisades Fire on Jan. 13, they spread across a general area where they believe the blaze originated, and studied the terrain, at times crawling or slithering across the charred ground to find clues.
Ultimately, they were able to narrow a specific area of suspected origin—and then a single bush from where the fire allegedly emerged.
Firefighters had described firebrands or embers that came off the Lachman Fire, which burned from north to south. A detailed analysis, investigators say, confirmed their hypothesis that the Jan. 1 fire had smoldered underground until resurfacing seven days later, when it was picked up by winds and continued as the Palisades Fire.
“We started identifying burned out roots, some exposed and some not,” Hill said. “That was indicative of fire burning underground in the root structure of the shrub. We know the fire came out of this root ball and spread out.”
Compromised Crime SceneHaney noted—and Hill acknowledged—that investigators could not preclude the existence of an unknown combustible that may have been lost in the fire, or during suppression or cleanup activities.
If the allegation is that Rinderknecht maliciously and willfully started the Lachman Fire, Haney said, the crime scene was compromised.
The fact that people were allowed to walk through a crime scene for nine days was “not ideal,” Hill acknowledged.
Under redirect, the witness said that in nearly 800 fire scenes he’d worked during the course of his career, the majority involved some kind of water suppression before investigators arrived—meaning it was a common condition and one for which agents are trained to take into account.
“Water didn’t wash away the surveillance footage, did it?” Mark Williams, attorney with the Department of Justice, asked.
“It did not,” Hill said, explaining that investigators used the surveillance footage to construct a detailed timeline of when the fire was first visible and how it developed, which they compared with a timeline of the defendant’s movements.
Haney suggested that timeline was incomplete—some videos were taken from miles away and didn’t have audio. And while footage may have depicted when the fire was visible, it didn’t show when it started.
Where Hill said investigators determined the fire ignited between 12:10–12:12 a.m.—when it shows up on surveillance video—Haney noted there was no direct evidence of such.
“You don’t have any cameras that show ignition of when the Lachman Fire occurred, do you?”
“No,” Hill replied.
Social Isolation, Escalating Anger Drove Palisades Arsonist’s Desire for Revenge, Analyst Tells JuryHowever, as Luciano-Adams continues, a behavioral analyst on Wednesday told a federal jury that social isolation and escalating anger helped drive a 29-year-old Uber driver to ignite a brush fire in the Santa Monica Mountains, which days later would resurface as the deadly inferno that killed 12 people and leveled more than 6,000 homes in the wealthy coastal enclave of the Pacific Palisades.
Dr. Kevin Kelm, a retired supervisory special agent with the U.S. Bureau of Alcohol, Tobacco, and Firearms who specializes in behavioral analysis and criminal profiling related to arson, alleges Jonathan Rinderknecht was motivated by an “expressive,” or emotionally driven, and opportunistic desire for revenge on society at large.
“In my opinion, the defendant exhibited behavior consistent with [a] ‘revenge’ or ‘societal motivated revenge’ fire,” Kelm said, describing his analysis of Rinderknecht’s behavior before, during, and after the fire.
The state argues that Rinderknecht’s deteriorating mental state and escalating fixation on themes such as wealth disparity, “climate change,” and vigilantism in the months leading up to the fire reveal his motive.
Arsonists motivated by societal revenge, Kelm said, referring to an arson motive typology used by the FBI, typically have many things going wrong in their lives and fixate on problems, which are exacerbated by an accumulation of stressors–including interpersonal relations and social isolation.
“These pressures continue to build and build,” Kelm said, and the act of setting a fire “provides some emotional relief and diversion from the problems.”
Analysis of Rinderknecht’s behavior in the months leading up to the fire, including in fraught interpersonal relationships and in thousands of increasingly frustrated interactions with the OpenAI chatbot ChatGPT, is evidence of such escalation, Kelm said.
“It goes to the inability to deal with a stressor. And it was focused on a large stressor for the defendant, which has to do with societal issues, one being wealth inequality and large corporations that were distressing to [him],” said the analyst, who previously worked on cases related to both the Oklahoma City Bombing of 1996 and the 911 terrorist attack on the Pentagon.
Digital records uncovered in the investigation reveal that Rinderknecht was at least fixated on a tableau pitting the world’s rich and powerful against the rest of society and the environment, and related feelings of loneliness and helplessness. Uber passengers who rode with him around the time of the fire testified about vitriolic, threatening rants, “incel vibes,” and erratic behavior.
Steve Haney, his attorney, has argued that none of this makes him an arsonist.
Cross-examining Kelm on Wednesday, Haney suggested that many people are upset about large corporations, politics, the wealth disparity, or “climate change.”
“Much of what you’ve testified and observed is pretty normal American thinking right now, isn’t it?” Haney queried.
“I didn’t cherry-pick,” Kelm said, noting that each behavior on its own may not in itself constitute motivation. “You’re correct. Each one of these things applies to large parts of the population. But not when it’s in your everyday life and occurs over and over and in all these domains … it becomes controlling and the behavior is a response to that.”
Societal revenge arsonists, according to the FBI typology, do not plan.
“It’s extremely impulsive. And in this case, the defendant put himself at the location. He stopped taking work calls, he went to this isolated location he had familiarity with,” Kelm said, noting that almost all arsonists choose locations that are in their environment or “comfort zone.”
The witness said investigators’ conclusion that Rinderknecht started the fire with a lighter, as opposed to accelerants or other ignition methods, was consistent with expressive arson.
While Rinderknecht’s attorneys point out he called 911 repeatedly to report the fire, investigators allege such was part of a staging he did to appear cooperative and deflect suspicion, which Kelm said was common in arson cases.
Authorities also suspect the defendant attempted to cover his tracks by making a screen video of a 911 call and by asking ChatGPT whether one could be blamed for a fire started with a discarded cigarette.
The defendant’s “methodical stroll” down the hill as he made 911 calls, Kelm said, “is just totally inconsistent with someone who discovers a fire.”
The ChatGPT query, Kelm argued, was “unnecessary behavior” by Rinderknecht. “It’s excessive, and very inconsistent with what I’d expect an average individual to do when trying to report a fire and get out of harm’s way.”
Firefighters work to extinguish the Palisades Fire burning near Los Angeles, Calif., on Jan. 8, 2025. John Fredricks/The Epoch Times
After leaving the scene, Rinderknecht returned and took videos of the fire and first responders; Kelm suggested this could indicate the fire was a source of excitement—another motive typology.
But the emotional release that an expressive arsonist may feel after lighting a fire, Kelm said, can be short-lived.
“I think once some of the initial excitement wears off, the daily routine hasn’t changed. It’s back to being an Uber driver, to not making enough money: listening to partygoers sitting in your back seat having a great time while your life hasn’t changed at all,” he said.
Kelm described the defendant’s behavior, both before and after the fire, as typical of a “a grievance collector—things go wrong, and he’s not the cause, it’s always someone else’s fault.”
Writ large, the profiler said, the behavior took on increased significance, as the pieces fit together like a “jigsaw puzzle.”
“What I’m looking for is to see this pattern emerge over time in all of the domains … it tells me what the whole picture is,” Kelm said.
Haney asked whether anger-motivated arsonists want to destroy things.
“No, not necessarily. The act of actually setting the fire is the objective. Oftentimes, the consequences are very surprising to the individual and result in a panic response, because what happens wasn’t what was expected.”
Haney asked whether Kelm had ever, in a half-century of experience, seen a revenge arsonist call 911 17 times, as his client had.
“It’s pretty unusual,” Kelm said. “That caught my attention.”
Tyler Durden Thu, 06/18/2026 - 14:25