Hyperliquid Policy Center and Paradigm urge the U.S. to amend the proposed anti-money laundering rules
According to The Block, the Hyperliquid Policy Center (HPC) and venture capital firm Paradigm jointly wrote to the U.S. Department of the Treasury, requesting modifications to a proposed anti-money laundering rule. This rule was jointly proposed in April by the Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC), aiming to treat stablecoin issuers as financial institutions and requiring them to bear strict liability for transactions that cannot be effectively monitored.
HPC and Paradigm stated in the letter that they support FinCEN's focus on compliance obligations in the primary market, where issuers know their customers; however, in the secondary market, where issuers only see wallet addresses and transaction amounts, a more lenient approach should be taken. They believe that extending issuer liability to secondary market activities conducted through smart contracts will lead issuers to only deploy stablecoins in licensed environments, causing regulated stablecoins to exit DeFi and be replaced by unregulated offshore non-U.S. alternatives.
HPC and Paradigm suggested narrowing the definition of "activities related to payment stablecoins" and reconsidering OFAC's handling of interactions involving smart contracts.
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