Hyperliquid Policy Center and Paradigm have urged the U.S. Treasury to revise the proposed AML rule focusing on stablecoin issuers. The rule, launched by FinCEN and OFAC, seeks to impose strict legal responsibility for unmonitored transactions. Each entities assist focusing AML compliance on the first market however warn towards extending legal responsibility to the secondary market. They argue that such measures may undermine liquidity and crypto markets, driving stablecoins towards unregulated offshore platforms.
ChainCatcher report, in accordance to The Block, Hyperliquid Policy Center (HPC) and enterprise capital agency Paradigm collectively despatched a letter to the U.S. Division of the Treasury requesting revisions to a proposed anti-money laundering rule. The rule, collectively proposed in April by FinCEN and OFAC beneath the Treasury Division, goals to classify stablecoin issuers as monetary establishments and maintain them strictly chargeable for transactions they can’t successfully monitor. Of their letter, HPC and Paradigm expressed assist for FinCEN’s give attention to main market compliance obligations—particularly, issuer know-your-customer (KYC) procedures—however argued that in secondary markets, the place issuers solely see pockets addresses and transaction quantities, a extra versatile method must be adopted. They warned that extending issuer legal responsibility to secondary market actions performed by way of sensible contracts would incentivize issuers to deploy stablecoins solely in permissioned environments, driving regulated stablecoins out of DeFi and leaving the market to unregulated offshore non-U.S. greenback options. HPC and Paradigm advisable narrowing the definition of “actions associated to fee stablecoins” and reconsidering OFAC’s remedy of sensible contract interactions.
