Paradigm, HPC ask US Treasury to ease stablecoin AML rules

Crypto venture capital firm Paradigm and DeFi advocacy group the Hyperliquid Policy Center (HPC) have urged the U.S. Treasury Department to ease anti-money laundering (AML) regulations for stablecoins. According to The Block, the two organizations argued in a joint letter that proposed rules from the Treasury's Financial Crimes Enforcement Network (FinCEN) and Office of Foreign Assets Control (OFAC) could impose strict liability on issuers for transactions they cannot realistically control. The proposed regulations, introduced in April to implement the Stablecoin GENIUS Act, would treat stablecoin issuers similarly to financial institutions under the Bank Secrecy Act (BSA). While Paradigm and HPC agree with focusing AML obligations on the primary market where customer identification is possible, they warned that extending issuer responsibility to secondary market transactions via smart contracts could significantly stifle the use of DeFi.