🚨 GENIUS Act Sparks Controversy: U.S. Prosecutors Accuse Stablecoin Issuers of Profiting from Fraud
The proposed stablecoin legislation, the GENIUS Act, has faced severe criticism. New York Attorney General Letitia James and four district attorneys have written to senators, stating that the bill lacks protections for fraud victims.
What is the core issue?
⚖️ The Illusion of "Compliance": Prosecutors believe that the bill labels unregulated stablecoins as "legitimate," allowing issuers to evade strict scrutiny under anti-money laundering (AML) and counter-terrorism financing (CFT) regulations.
💰 Profits After Freezing Assets: The focus is on Tether (USDT) and Circle (USDC). Prosecutors point out that while issuers can freeze stolen assets, they often ignore law enforcement's requests to "return funds."
Specific allegations include:
Tether: Only "occasionally" freezes funds when cooperating with federal authorities and has no legal obligation to return to victims. Circle: Accused of retaining frozen assets in reserves and earning interest (profiting) while victims do not receive any money.
Prosecutors believe that in its current form, the GENIUS Act effectively allows crypto giants to profit from fraudulent funds, as they retain control over frozen assets and generate revenue from them.
The tug-of-war over U.S. stablecoin regulation is intensifying. Do you think this will lead to stricter "mandatory return" mechanisms?🍿