Stablecoin Issuers Face New US Treasury Sanctions Compliance for Secondary Markets
BE
Brooks Elsworth
stablecoin regulation · Apr 14, 2026
Source: DojiDoji Data Terminal
Permitted payment stablecoin issuers (PPSIs) may now be held liable for prohibited conduct by US sanctions that occurs in secondary markets using their stablecoins. This requirement stems from a notice of proposed rulemaking (NPRM) released by the US Treasury's FinCEN and OFAC on April 8, which mandates sanctions compliance under the GENIUS Act.
While FinCEN has proposed that PPSIs will not be required to monitor secondary market activity for AML/CFT purposes or file suspicious activity reports (SARs), the Treasury Department expects issuers to maintain the technical capability to freeze, block, or reject funds in secondary markets in response to lawful orders.
Additionally, PPSIs must prevent stablecoins from being issued to or used by sanctioned parties in secondary markets, including peer-to-peer transactions between unhosted wallets. To ensure compliance, the NPRM indicates that issuers can leverage blockchain analytics to identify and prevent transactions involving wallets with OFAC-sanctioned parties.
To meet these requirements, PPSIs must establish AML/CFT and sanctions compliance programs with senior management oversight, conduct financial crime risk assessments, and appoint a responsible AML/CFT officer.