SIFMA Submits Stablecoin Compliance Recommendations to US Regulators on AML and Sanctions

According to SIFMA and SIFMA AMG, the industry groups submitted recommendations to the Financial Crimes Enforcement Network (FinCEN) and Office of Foreign Assets Control (OFAC) seeking clarifications on anti-money laundering, sanctions, and compliance obligations for payment stablecoin issuers under the GENIUS Act. The submission reflects growing Wall Street concern that stablecoin regulation may become operationally unworkable without major adjustments to existing compliance frameworks.

SIFMA highlighted a critical issue in secondary-market transaction control, requesting regulators clarify when stablecoin issuers should freeze transactions, block transfers, or enforce sanctions controls. The group noted that once tokens circulate on public blockchains, issuers often lose direct visibility into wallet holders and transaction counterparties, making traditional banking compliance expectations technically infeasible. SIFMA also requested legal safe-harbor protections for issuers acting in good faith when restricting transactions.