Key facts
- Anchorage Digital supports the US Treasury's proposed AML and sanctions framework for stablecoin issuers under the GENIUS Act.
- Anchorage, Hyperliquid, and Paradigm are seeking clearer standards for secondary-market sanctions liability.
- Hyperliquid and Paradigm argue the proposed rule could harm permissionless blockchain infrastructure and DeFi.
- The proposed rule would subject stablecoin issuers to AML and sanctions compliance requirements.
- Concerns exist that issuers may move to permissioned environments, potentially excluding regulated stablecoins from DeFi.
Anchorage Digital, a federally chartered crypto bank, has submitted a public comment letter supporting the US Treasury Department’s proposed Anti-Money Laundering (AML) and sanctions framework for the GENIUS Act. The company argues the rules strike a balance between compliance and innovation but urges Treasury to clarify secondary-market sanctions liability and enterprise-wide AML programs.
Hyperliquid Policy Center and venture capital firm Paradigm also submitted comments, echoing Anchorage's concerns about secondary-market activity but taking a more critical view. They argue the current framework could impose sanctions obligations on issuers even when they lack direct relationships with or visibility into users transacting on secondary markets through smart contracts.
The Treasury's proposed rules, issued in April, would classify payment stablecoin issuers as financial institutions under the Bank Secrecy Act, subjecting them to AML and suspicious activity reporting requirements. Hyperliquid and Paradigm contend that the proposal unfairly sweeps secondary market activity into an issuer's compliance perimeter, potentially incentivizing issuers to move to permissioned environments and harming the DeFi ecosystem.