A joint FinCEN-OFAC proposed rule under the GENIUS Act classifies Permitted Payment Stablecoin Issuers (PPSIs) as financial institutions under the Bank Secrecy Act. PPSIs must build full AML and OFAC-aligned sanctions compliance programs, including internal controls, compliance officer, training, independent testing, customer identification, suspicious activity reporting, risk assessment, screening, and recordkeeping. The rule formalizes freeze and seizure as a technical requirement on-chain. The preamble cites TRM research identifying two UK exchanges processing ~$1 billion in IRGC-linked stablecoin flows before OFAC designation. Comments close June 9, 2026. Industry-led freezing capability is already operating at scale: T3 Financial Crime Unit has frozen 450 million USDT (since Aug 2024), and Beacon Network disrupted >$8.74 million in illicit activity (as of May 19, 2026).

Key facts

• GENIUS Act PPSI rule classifies stablecoin issuers as financial institutions under BSA.
• PPSIs require full AML and sanctions programs with freeze and seizure capability on-chain.
• Rule cites ~$1 billion IRGC-linked stablecoin flows through two UK exchanges before OFAC action.
• Comments close June 9, 2026; final rule expected later in 2026.
• Industry examples: T3 frozen 450M USDT; Beacon Network blocked >$8.74M in illicit activity.