New York Attorney General Letitia James and Prosecutor Alvin Bragg pointed out a serious 'loophole' in the new legislation in the USA, signed by Donald Trump in July 2025.
What is the essence of the claims?
The GENIUS law, which was supposed to regulate market stability, requires issuers (Tether, Circle) to hold 100% of reserves in liquid assets. However, it lacks a provision for the return of stolen assets to victims.
Key facts from the indictment:
Profits from blood: Prosecutors claim that in 2024 alone, Tether and Circle earned about $1 billion from interest on U.S. government bonds. Part of this money is the interest accrued on frozen funds of hacking and fraud victims.
The freezing mechanism: When Circle or Tether block a wallet with stolen USDC/USDT, the funds remain under their control, continuing to generate profit for the issuer instead of being returned to the owners.
The numbers are striking: As of November 2025, Circle held over $114 million in frozen funds. In total, from 2023 to 2025, Tether blocked about 3.3 billion $USDT across more than 7,000 addresses.
Therefore, prosecutors insist: crypto companies must act like banks — if the court confirms the theft, the money should be returned to the person, not used by the corporation.
💬 Question to the community:
Do you think Tether and Circle should be forced to return frozen funds by court order?
👇 Share your thoughts in the comments!
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