Hyperliquid Policy Center and the venture capital firm Paradigm sent a joint commentary to the draft FinCEN and OFAC rule implementing the GENIUS Act requirement for fee-based steel bill issuers. The authors of the letter generally supported a regulatory focus on the primary market, where issuers have a direct relationship with customers, but requested that obligations for secondary transactions be narrowed and clarified - so as not to create an excessive burden on public blockchain and decentralized protocols.

Key proposals include maintaining issuers' exemption from submitting suspicious activity (SAR) reports on secondary transactions; requiring that the Travel Rule be extended to alias transfers between wallets if operators have no direct relationship with transaction participants; Expansion of a "safe harbor" for voluntary data transfer to regulators - to protocol developers, self-contained storage interfaces and infrastructure services.

Separately, companies are asked to recognize sufficient contract-level interoperability measures - including transfer restrictions and address block lists - and clarify that money laundering provisions should not apply to developers, protocol members, and other entities.infrastructure.

The draft regulation, published on 8 April, obliges issuers to submit SAR, provide a technical capability for blocking, freezing and rejecting prohibited transactions, comply with lawful orders of authorities, and implement an effective sanctioning program.

Recall that in June, the nonprofit Blockchain Association sent an open letter to US Senate Presidents John Tuun and Chuck Shumer urging them to accelerate passage of the CLARITY Act.