Hyperliquid, Paradigm Push for Changes to GENIUS Act Stablecoin AML Rules

Paradigm and Hyperliquid Policy Center are urging the U.S. Treasury to revise its proposed anti-money laundering and sanctions rules for stablecoin issuers.

In a letter released on Tuesday, the two groups said that responsibilities related to secondary market activity need clearer limits and definitions. They warned that without clarification, the rules could create unintended impacts on permissionless blockchain systems and decentralized finance ecosystems.

They emphasized that compliance requirements should be centered on the “primary market,” where stablecoin issuers have direct access to customer information. At the same time, they supported a narrower approach for the secondary market, where only wallet addresses and transaction data are generally visible. This view mirrors the framework used by the Financial Crimes Enforcement Network.

The response was submitted after a Treasury proposal in April aimed at implementing parts of the GENIUS Act. The proposal would require stablecoin issuers to block, freeze, or reject transactions that violate U.S. laws or sanctions in both primary and secondary markets.

Source: Hyperliquid Policy Center