Hyperliquid and Paradigm Advocate for Secondary Market Clarifications in Stablecoin Rule

Two prominent players in the cryptocurrency industry, Hyperliquid and Paradigm, have submitted a joint comment on the proposed rule by FinCEN and OFAC regarding the implementation of GENIUS Act requirements for payment stablecoin issuers.

The authors of the letter generally supported the idea of concentrating most issuer obligations on the primary market where there is a direct relationship with the customer. However, they also requested to narrow and clarify several requirements for the secondary market to 'avoid unnecessary burdens' on public blockchains and DeFi.

One of their key proposals is to maintain the approach where issuers are not required to file Suspicious Activity Reports (SAR) for secondary operations. Additionally, the Travel Rule should apply to pseudonymous transfers between wallets if operators do not have direct relationships with transaction participants.