Hyperliquid & Paradigm dey push make dem relax AML rules for GENIUS stablecoin
Hyperliquid Policy Center and Paradigm request say make US Treasury change how GENIUS Act dey handle AML and sanctions for stablecoin issuers. For one letter wey dem send on Tuesday, dem talk say the proposal too tight for permissionless blockchain infrastructure and fit cause “unintended consequences” for DeFi.
The main wahala na how GENIUS money laundering rule dey treat secondary-market activity. Hyperliquid and Paradigm dey support FinCEN idea to focus compliance on the primary market where issuers get customer information. Dem no gree make issuer duty extend to secondary-market flows through wallets, decentralized exchanges, and smart contracts because issuers no fit “meaningfully police” on-chain transactions wey dem no fit identify.
Dem warn say the rule fit push regulated stablecoins go permissioned environments, draw liquidity from DeFi and leave demand for unregulated offshore, non-dollar alternatives. GENIUS Act don sign into law, implementation target na latest January 2027, and wider debate dey around CLARITY Act wey fit adjust requirements and compliance liability for open-source crypto developers.
Bearish
Regulatory uncertainty about di GENIUS Act AML and sanctions mechanics for stablecoin fit fit fit fit fit fit fit fit kin fit reduce DeFi-friendly liquidity paths. For short term, traders fit expect say regulated stablecoins go shift to permissioned venues if issuer 'strict liability' expand into secondary-market smart-contract flows—wey fit tighten liquidity where DeFi dey thrive. For longer term (till 2027 implementation), any final rules wey still put difficult-to-police secondary-market duties on issuers fit permanently reroute capital from permissionless DeFi to permissioned or offshore alternatives. For HYPE (Hyperliquid), dat mean higher risk of lower on-chain composability and volume during di rulemaking window, wey normally be bearish for related DeFi venues.