Paradigm and Hyperliquid Policy Center Push Treasury to Narrow Stablecoin AML Rules

According to a letter sent Tuesday, Paradigm and the Hyperliquid Policy Center urged the U.S. Treasury to narrow proposed anti-money laundering rules that would extend Bank Secrecy Act and sanctions obligations to stablecoin issuers under the GENIUS Act.

The groups argue that current rules could expose issuers to liability for secondary-market transactions conducted through blockchain smart contracts over which they have no direct control. They support applying compliance obligations primarily to the primary market, where issuers directly interact with customers, but seek to clarify or limit secondary-market obligations to avoid unintended consequences for public blockchain infrastructure and DeFi.