§5907 Anti-money Laundering Protections

Summary

Foreign companies that issue payment stablecoins must have the technical ability to follow lawful U.S. orders before their coins can be offered, sold, or traded in the United States through U.S. crypto platforms. If the Treasury Department finds a foreign issuer is breaking that rule, the Secretary of the Treasury can label the issuer as noncompliant and send a written notice, usually within 30 days of finding the problem. That noncompliance finding can be appealed to the U.S. Court of Appeals for the District of Columbia Circuit. If the issuer still does not follow the order within 30 days after the notice, the Treasury will publish the noncompliance and a ban on U.S. platforms helping secondary trading of that stablecoin in the Federal Register. The trading ban takes effect 30 days after that notice. The Treasury can lift the ban when the issuer meets standards the Treasury sets and will publish that decision. Penalties can be imposed: up to $100,000 per violation per day for U.S. crypto platforms that break the trading ban, and up to $1,000,000 per violation per day for foreign issuers that keep offering the coin. The Treasury can also sue for penalties and ask courts to block transactions. The Treasury may grant case-by-case waivers or licenses if banning trading would harm the U.S. financial system or the issuer is fixing the problem; national security or law enforcement uses can get special exceptions. The Treasury must report to key Congressional committees within 7 days after issuing a waiver or license. This does not change other Treasury powers to block or limit U.S. dollar–linked stablecoin transactions.