Overview
- Paradigm and the Hyperliquid Policy Center filed a joint comment to the U.S. Treasury on Tuesday asking FinCEN and OFAC to narrow secondary‑market obligations in the draft rule implementing the GENIUS Act.
- The groups say the proposal would create near‑strict liability for issuers for transfers and smart‑contract interactions that issuers cannot identify or control because they only see wallet addresses and amounts on public blockchains.
- Under the April draft, permitted payment stablecoin issuers are treated like financial institutions and would be required to run AML and sanctions programs, block or reject unlawful transactions, and file suspicious activity reports.
- They warned that those duties could push issuers to limit deployments to permissioned systems, cause U.S. validators and protocol builders to relocate offshore, and impose large volumes of low‑value SARs that burden firms and FinCEN.
- Agencies will review public comments before finalizing the rule and parallel work on the CLARITY Act could change how developers, validators, and other infrastructure actors are treated in the final regulation.