US Treasury Moves to Bar Investment in Adversary AI, Chip and Quantum Firms Under New COINS Act Rules

The US Treasury on Wednesday proposed rules that would bar American investors from funding a wider range of Chinese and other adversary technology companies, adding supercomputing, hypersonics and biotechnology to the chips, quantum and artificial intelligence sectors already covered.

The proposal implements the Comprehensive Outbound Investment National Security (COINS) Act, which became law on December 18, 2025, as part of the 2026 defense bill. It turns what began as a 2023 executive order into a statute-backed program, and it moves faster on artificial intelligence than the rules in force today.

"The proposed regulations would strengthen the existing Outbound Investment Security Program to prevent our adversaries from using U.S. investment to develop critical technologies that threaten U.S. national security," Treasury Secretary Scott Bessent said in a statement.

From three sectors and one country to six of each

The current rules, in effect since January 2, 2025, cover three technology areas and one country of concern: China, including Hong Kong and Macau. According to Treasury's fact sheet, the proposal adds high-performance computing and supercomputing, hypersonic systems and biotechnology, which Bessent added on top of the five areas listed in the law. It also names Cuba, Iran, North Korea, Russia and Venezuela under the Maduro regime, although Treasury notes that the current Venezuelan government does not meet that definition.

The sharpest change is in artificial intelligence. Today, investors must sort AI deals by training compute and intended use: some are banned, others only need to be reported. The proposal renames the category "super intelligence systems" and makes the development of any such system a prohibited technology, removing the notification tier. Treasury says the approach spares investors from having to judge a model's technical capabilities themselves.

Other activities stay notifiable rather than banned. These include integrated circuits not otherwise prohibited, high-bandwidth interconnects used in supercomputers, and some sensors and software linked to hypersonic systems.

Christopher Pilkerton, Treasury's assistant secretary for investment security, said the rules "are designed to address risks that can arise when foreign adversaries try to benefit from U.S. investment in key technology sectors."

What it means for investors, and for crypto

The rules target direct deals: equity stakes, convertible debt, joint ventures, greenfield projects and some limited partner commitments to foreign funds. Ordinary portfolio investors are largely outside their scope. Publicly traded securities and shares of investment companies, including index funds, mutual funds and ETFs, are excepted, as are derivatives on them. A new de minimis exception covers deals up to $50,000 over 12 months, but only for the notification requirement, and limited partners committing $2 million or less are also excepted.

By BullishStation's count, the 46-day comment window runs to December 7, and the law gives Treasury 450 days from enactment, or until about March 13, 2027, to issue final rules. Until then, the 2025 rules keep applying.

Neither the press release, the fact sheet nor the proposed rule mentions digital assets, blockchain or crypto mining. The link to crypto markets runs through AI and chips: the same advanced semiconductors and data-center computing that power AI models are central to the convergence of AI and blockchain, and tighter US limits on Chinese AI funding feed into the broader tech rivalry that already weighs on Chinese AI valuations.

The proposal also shows how far Treasury's national security toolkit now reaches. The same department imposed a $1.21 billion anti-money laundering and sanctions penalty on Bank of America last week, and its sanctions programs already cover Iranian crypto funds.

The outbound program is still young by the standards of US export controls. President Joe Biden's executive order dates from August 9, 2023, and Treasury's first final rules were issued on October 28, 2024. The COINS Act makes those limits harder to reverse by writing them into law, at a time when AI rules on both sides of the Atlantic are still being written.

What comes next: comments are due on December 7, 2026 through regulations.gov, and the final rule, which will set the effective date, is due by about March 13, 2027. Investors with stakes in Chinese technology start-ups will want to watch how Treasury defines "super intelligence," since the proposal leaves no notification route for that category.

Related: How geopolitics moves crypto markets · Russia opens crypto trading through its biggest banks

Sources: US Treasury press release sb0667 (Oct. 22, 2026) · COINS Act notice of proposed rulemaking · Treasury fact sheet and FAQs · Outbound Investment Security Program

This article is for information only and is not investment advice. Crypto-assets are volatile and you can lose all of your capital.