Proposed Rule to Implement the GENIUS Act’s Anti-Money Laundering Obligations and Sanctions Compliance Program Requirements

Fact Sheet: Proposed Rule to Implement the GENIUS Act’s Anti￾Money Laundering Obligations and Sanctions Compliance Program Requirements The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC) are issuing a joint proposed rule that would implement provisions of the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act). The GENIUS Act provides a framework for the federal regulation of payment stablecoins. It directs that permitted payment stablecoin issuers (PPSIs) be treated as financial institutions for purposes of the Bank Secrecy Act (BSA) and be subject to all Federal laws applicable to financial institutions located in the United States relating to economic sanctions, prevention of money laundering, customer identification, and due diligence. It tasks the Secretary of the Treasury with implementing these provisions by issuing regulations, tailored to the size and complexity of PPSIs. The proposed rule implements the GENIUS Act’s anti-money laundering and sanctions program provisions. By implementing this framework, Treasury’s proposal seeks to mitigate potential illicit finance risks through an appropriately tailored regime that protects the U.S. financial system and national security interests. As directed by the GENIUS Act, among the obligations included in the proposal are the requirement for PPSIs to:

• establish and maintain an anti-money laundering and countering the financing of
  terrorism (AML/CFT) program;
• report suspicious activity;
• have the technical capabilities, policies, and procedures to block, freeze, and reject
  specific or impermissible transactions that violate Federal or State laws, rules, or regulations;
• have the technical capabilities to comply, and do comply, with the terms of any lawful
  order; and
• maintain an effective sanctions compliance program.
  The following is an overview of the proposed rule’s key elements. Please refer to the full notice of proposed rulemaking for details. Overview of Proposed Anti-Money Laundering Obligations The proposed rule would implement the GENIUS Act’s requirement that PPSIs be treated as financial institutions under the BSA and applies anti-money laundering obligations specified in