Hyperliquid Policy Center and Paradigm have jointly urged the U.S. Treasury to revise proposed money laundering rules tied to the GENIUS Act, arguing the requirements are too onerous for stablecoin issuers. The intervention targets a regulatory framework seen as critical to shaping the future of dollar-pegged digital assets.
The firms contend the current language would impose compliance costs and operational hurdles disproportionate to the risks posed by stablecoins. They did not specify alternative thresholds but called for a more calibrated approach that balances financial integrity with innovation. The Treasury has yet to respond publicly to the comments.
The GENIUS Act, proposed in Congress, aims to establish federal oversight of stablecoin issuers, including know-your-customer and anti-money laundering provisions. Critics warn that without revision, the rules could drive issuers offshore or stifle development of U.S.-based stablecoin projects. The Treasury's comment period remains open.
Market reaction has been muted, with stablecoin sector capitalization holding steady near $160 billion. The sector has grown roughly 12% year-to-date, outpacing broader crypto market gains. The pushback highlights a growing tension between regulators seeking tighter controls and a crypto industry wary of overreach.
Paradigm, a major crypto venture firm, and Hyperliquid, a decentralized exchange, represent a coalition of DeFi and infrastructure players. Their joint stance signals that even well-capitalized participants find the current draft unworkable. Without revision, the U.S. risks losing stablecoin leadership to jurisdictions like the EU, which has already enacted MiCA regulations.