Paradigm and HPC's joint letter makes a lot of sense. Locking compliance pressure on the primary market is the right approach. If secondary DeFi trading also makes issuers take the blame, on-chain innovation will really have no room to play.

Hyperliquid Policy Center (HPC) and Paradigm jointly send a letter to the U.S. Department of the Treasury, calling for revisions to the anti-money laundering rules proposed by FinCEN and OFAC to implement the GENIUS Act. The two parties support limiting the compliance obligations of stablecoin issuers primarily to the primary market but believe that OFAC's proposal to extend responsibility to secondary market transactions driven by smart contracts could make issuers liable for transactions they cannot practically control, thereby undermining the use of regulated stablecoins in DeFi and open blockchain environments. Both organizations recommend further narrowing the relevant definitions and re-evaluating the regulatory requirements for smart contract interactions. (The Block)