Hyperliquid, Paradigm urge revision of GENIUS money laundering rule
Hyperliquid’s policy arm and Paradigm urged the US Treasury to narrow a proposed AML and sanctions rule for stablecoin issuers. They support focusing compliance on the “primary market,” where issuers know their customers, and limiting obligations in the “secondary market,” where issuers mainly see wallets and transactions. They argue the proposal wrongly extends issuer liability to secondary activity and smart contract interactions they cannot realistically police. They warn that forcing issuers to block, freeze, or reject transactions across permissionless networks would push US-regulated stablecoins into permissioned environments and DeFi out of compliance, creating room for offshore, non-dollar alternatives. The request responds to Treasury’s effort to implement GENIUS Act stablecoin rules, due by January 2027.
