Paradigm and Hyperliquid Challenge U.S. Stablecoin AML Rules
- Paradigm and the Hyperliquid Policy Center have opposed proposed U.S. anti-money laundering (AML) rules for stablecoin issuers.
- The groups argue that holding issuers accountable for secondary market activity could drive regulated stablecoins away from DeFi.
- Broad rules may lead to confusion among issuers and infrastructure providers, according to industry observers.
- A letter was sent to FinCEN and OFAC challenging the rule under the GENIUS Act’s AML requirements.
- The groups warn of a potential “chilling effect” on deploying stablecoins on permissionless blockchains.
Paradigm and the Hyperliquid Policy Center caution that proposed AML regulations could hinder the role of U.S.-regulated stablecoins in decentralized finance by conflating issuer obligations with secondary market activities.
This approach might lead to unnecessary regulatory burdens, potentially pulling stablecoins out of DeFi environments, as argued by these industry groups in their communication to U.S. regulators. (Source)
