Blockchain Association Seeks Explicit Exemptions in GENIUS Act Rule

The Blockchain Association wants Treasury to spell out existing GENIUS Act exemptions in a proposed stablecoin rule, clarifying which crypto businesses would face U.S. issuance and sales restrictions.

In comments submitted Oct. 19, the group focused on Treasury’s proposal to implement Section 3 of the law. The GENIUS Act already excludes specified self-custodial interfaces and validation activities from the definition of a “digital asset service provider.” Treasury’s proposal incorporates those exclusions by reference, but the association wants them stated directly in the rule.

The group also wants Treasury to clarify that buying or selling stablecoins for a firm’s own account does not, by itself, make the firm a digital asset service provider.

On criminal liability for participation in unlawful stablecoin issuance, the association proposes a standard requiring knowledge of the facts that make the issuance unlawful. It also wants liability to require affirmative, substantial assistance coordinated with the issuer.

For foreign-issued stablecoins, the group proposes that digital asset service providers be able to rely on the foreign issuer registration list, effective prohibitions on secondary trading, and any rescissions or revocations when assessing compliance. That reliance would not apply when a provider actually knows contrary facts.

The association also asks Treasury to let digital asset service providers assess whether a counterparty is in the United States using actual knowledge and information normally obtained in a transaction. It points to permissionless protocols as an example of where location information may be unavailable. The group has also asked Treasury to coordinate the rule’s effective date with other GENIUS Act regulations.