Paradigm Hyperliquid urge Treasury narrow stablecoin AML

Two major cryptocurrency industry groups have formally urged the U.S. Treasury Department to narrow proposed anti-money laundering rules for stablecoins, warning that the current draft could undermine the domestic digital asset ecosystem. In a joint letter submitted on Tuesday, June 9, 2026, the venture capital firm Paradigm and the advocacy group Hyperliquid Policy Center argued that the regulatory proposal overextends the compliance obligations of stablecoin issuers into secondary markets they cannot control.

The proposal, issued in April by the Treasury’s Financial Crimes Enforcement Network (FinCEN) and Office of Foreign Assets Control (OFAC), aims to implement provisions of the GENIUS Act passed last year. It would treat permitted payment stablecoin issuers similarly to traditional financial institutions under the Bank Secrecy Act. The industry groups expressed general support for this framework, particularly its focus on primary market activities where issuers have a direct customer relationship for functions like issuance, redemption, and custody, enabling standard know-your-customer checks.

Their central objection concerns the rule’s application to secondary market...