Anchorage backs GENIUS AML rule, seeks secondary-market clarity

Anchorage Digital, a federally chartered crypto bank, backed the U.S. Treasury’s proposed GENIUS anti-money laundering and sanctions framework while asking regulators to clarify how the rules would apply to secondary-market activity and enterprise-wide compliance. The bank filed a public comment letter published Wednesday responding to the April proposal.

The proposal, issued jointly by the Financial Crimes Enforcement Network and the Treasury’s Office of Foreign Assets Control, would classify payment stablecoin issuers as financial institutions under the Bank Secrecy Act. That classification would subject issuers to customer due diligence, suspicious activity reporting, enhanced monitoring and expanded recordkeeping requirements.

Anchorage said the framework generally places AML obligations on regulated stablecoin issuers in a way that balances compliance and operational realities, but the letter identified several areas needing more detail. The bank asked Treasury to explain when an issuer should be held liable for sanctions breaches that arise from secondary-market transactions routed through smart contracts. Anchorage also sought guidance on how enterprise-wide AML programs and correspondent-account requirements should apply to crypto firms.

The letter warned against imposing strict liability on issuers that lack direct visibility into users who transact on secondary markets via smart contracts. In the submission Anchorage wrote, “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.”

Support for the proposal has been mixed within the crypto industry. The lobbying arms of a crypto derivatives exchange and a venture capital firm submitted a separate comment letter arguing the proposal could assign sanctions liability to issuers even when they do not have a direct relationship with, or visibility into, the transacting parties. Those groups criticized language that treats smart contract interactions as a continuing provision of services that could trigger sanctions obligations.

The Treasury’s joint proposal aims to align stablecoin issuers with existing U.S. AML and sanctions compliance standards while adding monitoring and recordkeeping obligations intended to address illicit finance risks. The agencies are in a public comment period as they consider how to apply longstanding financial rules to decentralized and programmable payment rails. Anchorage’s requests for clarity on secondary-market liability, enterprise-wide program expectations and correspondent account rules are among the issues likely to be reviewed as the rulemaking proceeds.