Anchorage gives Treasury's GENIUS rules an A for effort, an incomplete on homework 📝

Anchorage Digital, a federally chartered crypto bank and stablecoin infrastructure provider, has submitted a public comment letter supporting the US Treasury Department's proposed Anti-Money Laundering and sanctions framework for the GENIUS Act, while urging the agency to resolve outstanding questions around secondary-market liability, enterprise-wide AML programs and correspondent account requirements. In a letter published Wednesday, Anchorage said the proposed rules largely strike the right balance between compliance and innovation by placing AML obligations on regulated stablecoin issuers, but argued that those issuers should not face strict liability for failing to independently identify sanctioned users who transact on secondary markets through their smart contracts. "A final rule that is clear and workable gives regulated institutions the certainty they need to build, and strengthens U.S. leadership in the next generation of payments and settlement infrastructure," Anchorage wrote.

The comments address Treasury rules proposed in April that would classify payment stablecoin issuers as financial institutions under the Bank Secrecy Act, subjecting them to AML, customer due diligence and suspicious activity reporting requirements. The proposal, jointly issued by the Financial Crimes Enforcement Network (FinCEN) and Treasury's Office of Foreign Assets Control (OFAC), would align stablecoin issuers with existing US anti-money laundering and sanctions compliance standards while imposing enhanced monitoring and recordkeeping obligations.

Industry support for the rulemaking has not been uniform. The lobbying arms of crypto derivatives exchange Hyperliquid and venture capital firm Paradigm recently submitted their own comment letter seeking greater clarity on secondary-market obligations, echoing Anchorage's concerns while taking a more critical view of the proposal. The groups argued that the current framework could impose sanctions obligations on issuers even when they lack a direct relationship with, or visibility into, users transacting on secondary markets. "OFAC sweeps secondary market activity into the issuer's compliance perimeter, treating smart contract interactions as an ongoing 'provision of services' that carries sanctions liability regardless of whether the issuer has any relationship with, or visibility into, the transacting parties," they wrote.