Banks Tell Regulators: Stablecoin Crime Scene Starts After the Issuer Leaves 🏦

Banking trade groups are pressing U.S. regulators to extend anti-money laundering and sanctions rules to stablecoin activity that occurs after issuance, arguing in joint comment letters released June 10, 2026, that the bulk of illicit finance involving payment stablecoins takes place on secondary markets where issuers have limited visibility. In two letters to the Financial Crimes Enforcement Network and the Office of Foreign Assets Control, the Bank Policy Institute and The Clearing House said current requirements "fail to impose sufficient obligations" on decentralized finance firms, certain digital asset custodians, and exchanges that facilitate such transactions.

The bank groups wrote that FinCEN and OFAC "correctly recognize" that "the majority of illicit finance involving payment stablecoins occurs on the secondary market" and that permitted payment stablecoin issuers "may have less information on secondary market transactions than on primary market transactions." Stablecoins are crypto tokens designed to track the value of another asset, typically the U.S. dollar, and permitted issuers are authorized to issue payment stablecoins in the U.S. under the GENIUS Act.

The BPI and The Clearing House letters called on regulators to prioritize "flexibility first," enabling banks to direct resources toward "the most urgent threats" while moving away from "check-the-box compliance" and closing gaps in oversight of secondary markets. The push marks a new front in a broader policy debate over how to implement the GENIUS Act's anti-money laundering framework without placing obligations on issuers for activity beyond their control.

Earlier in the week, crypto investment firm Paradigm and the Hyperliquid Policy Center sent a separate letter to FinCEN and OFAC warning that broad AML rules could push regulated dollar tokens out of permissionless DeFi if issuers are held accountable for transactions they cannot monitor after tokens move beyond primary issuance. The two industry letters highlight growing tension among banks, crypto firms, and policymakers over how to apply the GENIUS Act's AML and sanctions requirements across primary and secondary stablecoin markets.