Hyperliquid, Paradigm urge revision of GENIUS money-laundering rule

The Hyperliquid Policy Center and Paradigm urged the U.S. Treasury on May 21, 2024, to revise proposed money-laundering rules for the Generative AI and Novel Intelligence Utility Services (GENIUS) Act. In a joint comment letter, the organizations argued that the Treasury's current framework imposes excessively burdensome compliance requirements on stablecoin issuers. They specifically highlighted concerns that the proposed rules would necessitate extensive customer due diligence and transaction monitoring, which they contend are disproportionate to the actual risks posed by stablecoin transactions in the context of generative AI services. The groups suggested that a more tailored approach, focusing on specific high-risk activities rather than a blanket application, would better balance regulatory objectives with the need to foster innovation in the digital asset space. They emphasized that overly stringent rules could stifle the development and adoption of stablecoins, which are crucial for efficient digital transactions.