Hyperliquid and Paradigm warn proposed compliance rules could drive US-regulated stablecoins out of DeFi by 2027.
Hyperliquid and Paradigm urged regulators to revise the GENIUS Act’s anti-money laundering provisions, arguing they impose unworkable compliance burdens on stablecoin issuers. The firms said the rules would force issuers to restrict deployments to permissioned environments, pushing dollar-pegged assets offshore or into unregulated alternatives.
The GENIUS Act, signed into law last year, sets stablecoin regulations but leaves implementation details to federal agencies. Final rules are due by January 2027. Meanwhile, the Senate is debating the CLARITY Act, which could adjust liability for developers and issuers but remains stalled ahead of November elections.
Critics argue the current proposal risks fragmenting liquidity and undermining US oversight in decentralized finance. No immediate market reaction was reported.