Permitted Payment Stablecoin Issuer Anti-Money Laundering/Countering the Financing of Terrorism Program and Sanctions Compliance Program Requirements

A law firm (White & Case) is submitting a comment on behalf of a blockchain infrastructure client. They support FinCEN's proposed approach of providing permitted payment stablecoin issuers (PPSIs) with technological flexibility rather than prescriptive mandates to comply with AML/CFT and lawful order requirements.

D.D. Sayfer Information Security Ltd., a forensic blockchain-investigations and digital-asset recovery firm, supports the proposed rule but urges three specific clarifications. They argue that the final rule should explicitly confirm that issuers have the technical capability to move identified stablecoins into official custody (via burn-and-reissue), that civil orders qualify as "lawful orders," and that foreign issuers must comply with U.S. lawful orders regarding assets offered to U.S. persons.

Predicate, a blockchain infrastructure company, supports the proposed rule but advocates for greater discretionary power for Permitted Payment Stablecoin Issuers (PPSIs) to freeze assets in real-time. They argue that PPSIs are best positioned to identify and mitigate risks in dynamic secondary markets and recommend a principles-based approach that incorporates automated compliance tools.

The Crypto Council for Innovation (CCI), a global alliance of digital asset companies, supports the proposed AML/CFT and sanctions compliance framework for permitted payment stablecoin issuers. They advocate for a risk-based approach and request specific clarifications regarding secondary market obligations, technical limitations of smart contracts, and the need for a "safe harbor" for good-faith blocking actions.

XSOC CORP, a pre-commercial technology provider developing transaction authorization and compliance infrastructure, supports the proposed rule's objectives and its technology-neutral approach. The company argues that the final rule should explicitly recognize proactive, cryptographic pre-authorization enforcement as a valid method for meeting technical capability requirements, alongside traditional reactive controls. They also advocate for an outcome-based effectiveness standard, recognition of cryptographic records as compliance evidence, and the inclusion of post-quantum cryptographic migration requirements.

Paradigm Operations LP and the Hyperliquid Policy Center support the proposed rule but urge FinCEN and OFAC to clarify that obligations (such as SAR filings, KYC, and lawful orders) should not apply to secondary market activities or downstream protocol developers. They specifically advocate for excluding smart contract interactions on the secondary market from sanctions liability and request safe harbor protections for voluntary reporting by developers.

The Value Technology Foundation (VTF) supports the proposed rule and recommends that FinCEN and OFAC explicitly recognize biometric and facial recognition technologies as valid tools for AML/CFT and sanctions compliance. They argue that these technologies are essential for linking real-world identities to on-chain activity, combating synthetic identity fraud, and ensuring compliance with lawful orders while remaining consistent with GLBA privacy exceptions.

Notabene, Inc., a digital asset transaction platform, supports the proposed rulemaking for Payment Stablecoin Issuers (PPSI) and advocates for codified Travel Rule and recordkeeping obligations. They specifically support the MSB carve-out for PPSIs, the inclusion of wallet addresses in "account" definitions, and the preservation of the primary/secondary market distinction for SAR reporting.

The Global Blockchain Business Council (GBBC) supports the proposed AML/CFT and sanctions compliance requirements for payment stablecoin issuers. They advocate for a risk-based, technology-neutral framework that preserves flexibility for different business models while ensuring effective controls like Travel Rule data exchange and smart contract-based monitoring.

Transparency International U.S. supports the proposed rule to bring stablecoin issuers into the Bank Secrecy Act framework but argues that the requirements must be significantly strengthened. They advocate for more robust ecosystem-wide monitoring, lower suspicious activity reporting thresholds, stricter customer due diligence on wallet addresses, and faster implementation timelines to effectively combat illicit finance and corruption.