TLDR
- Ripple CLO Stuart Alderoty urges Treasury to protect stablecoin holders under the proposed GENIUS Act regulations.
- The NCA seeks temporary redemption windows when issuers lose authorization or fail to meet regulatory requirements.
- The association requests legal procedures to recover stolen stablecoins and replace assets under court orders.
- The NCA wants self-custody wallets and direct peer-to-peer transfers excluded from certain distribution restrictions.
- Treasury’s October 19 comment deadline has passed, but regulators have yet to finalize the Section 3 rules.
Ripple CLO Stuart Alderoty has urged the U.S. Treasury to protect stablecoin users as regulators develop GENIUS Act rules. The National Cryptocurrency Association (NCA), which Alderoty leads, filed comments on October 19 addressing Section 3.
The GENIUS Act established the framework. Now, Treasury’s rules must ensure that Americans are not stranded holding stablecoins if regulations change, have pathways to recover stolen funds, and can self-custody if they choose. https://t.co/tG4NknCzFF
— Stuart Alderoty (@s_alderoty) October 19, 2026
The submission supports full reserves for payment stablecoins but seeks clearer treatment of existing holdings, stolen funds, and personal wallets. Treasury’s consultation closed Monday. Regulators have not finalized these rules.
Ripple CLO Requests Time for Stablecoin Holders
The NCA wants a temporary window for holders to redeem, sell, or convert stablecoins if an issuer loses authorization. It argues that regulatory changes should not leave customers unable to access their funds.
Section 3 generally restricts service providers from offering noncompliant stablecoins to U.S. customers starting July 18, 2028. Issuer restrictions are expected to begin in January 2027. The association proposes a safe harbor allowing exchanges to help customers exit affected tokens without penalties.
Elsewhere, EU regulators classified Circle’s USDC for direct supervision beginning November 12. Those rules cover reserves, liquidity and redemption planning. They operate separately from Treasury’s proposal.
Court Orders Could Support Stolen Fund Recovery
The NCA asks Treasury to clarify whether issuers may replace stolen or mistakenly transferred stablecoins under court orders. It wants those actions covered by the law’s exception for lawful orders.
The group also seeks clear procedures for freezing tokens and notifying affected holders. It proposes aligning those procedures with Financial Crimes Enforcement Network standards.
Separately, Tether challenged a Senate report concerning Iran-linked USDT wallets. That dispute addresses sanctions compliance, rather than the recovery measures the NCA requested.
Self-Custody and Direct Transfers Face Scrutiny
The association wants Treasury to distinguish custodians from software developers who cannot control customer assets. It argues that wallet applications displaying balances should not count as stablecoin sellers.
The group also seeks protection for transfers between personal wallets, payments between individuals and movements across accounts controlled by one person. These activities should remain outside distribution restrictions, according to its comments.
Meanwhile, Coinbase expanded its Marqeta partnership for stablecoin-backed cards. The companies plan to support business card programs through custody, conversion, and blockchain settlement services.
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