Hyperliquid and Paradigm Call for Changes to Stablecoin Compliance Rules
- Hyperliquid and Paradigm submitted a letter to the US Treasury regarding proposed anti-money laundering rules for stablecoin issuers.
- They argue that compliance obligations should primarily focus on the “primary market,” where issuers have customer information.
- The proposed rules, part of the GENIUS Act, would require issuers to block or freeze transactions violating US laws in both primary and secondary markets.
- The letter claims that current proposals could push US-regulated stablecoins out of DeFi into unregulated environments.
- The GENIUS Act is set to be implemented by January 2027, with ongoing discussions about further regulations in the Senate.
Hyperliquid and Paradigm’s letter emphasizes the need for clarity in compliance obligations to protect permissionless blockchain infrastructure and the DeFi ecosystem from unintended consequences.
Their concerns highlight potential issues with enforcing compliance on secondary market activities, which they believe could lead to a withdrawal of regulated stablecoins from decentralized finance platforms.
