Overview
- Paradigm and the Hyperliquid Policy Center filed a joint public comment with the Treasury on Tuesday urging FinCEN and OFAC to revise the proposed anti‑money‑laundering and sanctions rule for permitted payment stablecoin issuers.
- The groups argued the draft imposes secondary‑market liability that would make issuers responsible for on‑chain transfers they cannot identify or control, and they asked regulators to focus compliance on primary‑market activity where issuers have customer relationships.
- They asked regulators to narrow the definition of “payment stablecoin‑related activity” and to clarify the scope of “lawful orders” so that developers, validators, smart contracts, and other protocol participants are not unintentionally swept into obligations.
- The filing warns that, if left broad, the rule would push issuers to deploy tokens in permissioned systems or encourage staking and blockbuilding to move to offshore jurisdictions, which would undercut the GENIUS Act’s aim to onshore digital‑asset infrastructure.
- FinCEN and OFAC are reviewing public comments before finalizing the rule and the Hyperliquid Policy Center was created and funded this year with roughly $29 million in HYPE tokens, with Jake Chervinsky leading the center’s work on the submission.