Hyperliquid, Paradigm urge revision of GENIUS money laundering rule

Written by Jesse Coghlanstaff editorReviewed by Felix Ngstaff editorWritten by Jesse Coghlanstaff editorReviewed by Felix Ngstaff editorHyperliquid, Paradigm urge revision of GENIUS money-laundering ruleLatest NewsPublishedJun 10, 2026The Hyperliquid Policy Center and Paradigm say the Treasury’s money-laundering rules for the GENIUS Act are too onerous for stablecoin issuers.The lobbying arm of crypto futures exchange Hyperliquid and venture capital firm Paradigm has urged the US Treasury to revise a proposed anti-money laundering and sanctions rule for stablecoin issuers.The Hyperliquid Policy Center and Paradigm said in a letter on Tuesday that some secondary market obligations should be clarified or narrowed “to avoid unintended consequences for permissionless blockchain infrastructure and the DeFi ecosystem.”The pair said they endorse the Financial Crimes Enforcement Network’s (FinCEN) approach of putting compliance obligations on the “primary market,” such as issuers who have customer information, and taking a “limited approach” to the secondary market, where issuers only see wallets and transactions.“The same principle should guide the agencies’ implementation of AML and sanctions requirements for stablecoins deployed to permissionless environments,” they argued.The letter was in response to a rule the Treasury proposed in April to implement GENIUS Act provisions relating to stablecoin issuers, requiring stablecoin issuers to have the capability to block, freeze or reject transactions that violate US law or sanctions on both the primary and secondary markets.Source: Stefan SchroppHyperliquid and Paradigm said the proposal sweeps secondary market activity into an issuer’s compliance perimeter that they “cannot meaningfully police.”They argued it also treats smart contract interactions as an activity that carries sanctions liability “regardless of whether the issuer has any relationship with, or visibility into, the transacting parties.”The pair said an issue…

Hyperliquid, Paradigm urge revision of GENIUS money laundering rule

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