It looks like a repeat of the Liberty Dollar to me, and that whole affair ended with charges of money laundering, mail fraud, wire fraud, counterfeiting, and conspiracy. https://en.wikipedia.org/wiki/Liberty_dollar_(private_curren...

Liberty Dollar was backed by gold. USDC is backed by USD.

The problem is not what the transfers are denominated in, you could have LamboCoin if you wanted. It's acting as an unlicensed money transmitter at all that will get you.

Denominating in gold or lambos or USD doesn't get you around KYC/AML laws. Decentralized ERC20 tokens designed to transmit money are inherently illegal, and setting one up will get you a visit from the SEC if you can be traced back to it in any way. There is no end-run around this, this behavior is literally the exact thing KYC/AML laws are designed to prevent.

(This coin gets around it because it is not decentralized - only the company can mine blocks on this chain, and they can block transactions at will and validate IDs/etc when transacting back to USD. This allows them to enforce KYC/AML. They are aiming to be a licensed money transmitter.)

A money market account is also not considered an illegal USD surrogate.