The US Treasury has proposed rules under the GENIUS Act, the country's new stablecoin law, that would allow exchanges and other digital-asset service providers to continue offering certain foreign-issued payment stablecoins only if they can justify their reliance on the issuer's promise to comply with lawful US orders.
Under the proposed rule, a provider could rely on a foreign issuer's representation that it has the technology and intent to comply with lawful orders, including valid orders to freeze or seize tokens where applicable, as well as reciprocal arrangements, but only after conducting reasonable due diligence.
Reliance on such a representation would be barred when the platform knows, has reason to know, or should know that the representation is false.
