The U.S. Treasury is moving ahead with new rules to implement the GENIUS Act’s anti-money laundering and sanctions requirements for stablecoin issuers, and the next fight is about how far those rules should reach. In its April proposal, Treasury said it wants to treat permitted payment stablecoin issuers as financial institutions under the Bank Secrecy Act. That would oblige them to maintain risk-based compliance programs designed to detect illicit finance and meet sanctions obligations.
The point of friction isn’t whether those programs apply, but where the line for compliance is drawn. Hyperliquid Policy Center, which is linked to the decentralised trading platform Hyperliquid, and crypto venture firm Paradigm have urged Treasury to keep those obligations focused on primary-market activity, where issuers deal directly with identifiable customers. Legal summaries of the draft say it also addresses some secondary-market activity, where an issuer may not be a direct party to a transaction but still has some technical ability to affect token movement. Treasury is still taking comments before finalizing, but the practical boundary of issuer compliance is now the central issue.