Odaily Planet Daily reports that New York State Attorney General Letitia James and four local prosecutors recently wrote to several Democratic lawmakers criticizing the significant flaws in the “GENIUS Stablecoin Act” signed into law by Trump last year, particularly its failure to require stablecoin issuers to return stolen funds in cases of theft.
The letter specifically mentions Tether (USDT) and Circle (USDC), arguing that the two major stablecoin issuers can still earn interest on assets after theft, while victims lack effective recourse. The New York prosecutors point out that although the law grants stablecoins greater “legitimacy endorsement,” it does not simultaneously strengthen key regulatory requirements such as anti-terror financing, anti-money laundering, and crypto scam prevention.
The GENIUS Act is currently in the implementation phase, requiring stablecoins to be fully backed by USD or high-liquidity assets, and mandating annual audits for issuers with a market cap exceeding $50 billion. However, the New York authorities believe these measures are still insufficient to address the widespread use of stablecoins in illegal financial transactions.
According to Chainalysis data, approximately 84% of illegal crypto transactions in 2025 involve stablecoins. Based on this, New York is calling for further strengthening of the regulatory framework to better protect consumer rights.
Disclaimer: The information on this page may come from third parties and does not represent the views or opinions of Gate. The content displayed on this page is for reference only and does not constitute any financial, investment, or legal advice. Gate does not guarantee the accuracy or completeness of the information and shall not be liable for any losses arising from the use of this information. Virtual asset investments carry high risks and are subject to significant price volatility. You may lose all of your invested principal. Please fully understand the relevant risks and make prudent decisions based on your own financial situation and risk tolerance. For details, please refer to
Disclaimer.
Related Articles
Aave, Kelp, LayerZero Propose Releasing $71M in Frozen ETH for rsETH Recovery
Gate News message, April 27 — Aave Labs, Kelp DAO, LayerZero, EtherFi, and Compound filed a Constitutional AIP on the Arbitrum forum Saturday morning, requesting the release of approximately $71 million in frozen ETH to support DeFi United, a cross-protocol relief effort following last week's $292 m
GateNews7h ago
US Sanctions Iran-Linked Crypto Wallets Holding $344M Frozen by Tether
U.S. Treasury Secretary Scott Bessent announced sanctions on multiple wallets linked to Iran as part of President Donald Trump's efforts to increase economic pressure on the country amid an ongoing ceasefire, according to CNN. The action followed Tether's freeze of $344 million in USDT on Tron,
CryptoFrontier9h ago
U.S. Sanctions Iran-Linked Crypto Wallets, Tether Freezes $344 Million USDT
Gate News message, April 26 — The U.S. federal government sanctioned multiple wallets linked to Iran on April 25, with Treasury Secretary Scott Bessent announcing the action as part of efforts to increase economic pressure on the country amid an ongoing ceasefire. The sanctions came a day after
GateNews15h ago
U.S. Sanctions Iran-Linked Crypto Wallets as Tether Freezes $344 Million USDT
Gate News message, April 26 — U.S. Treasury Secretary Scott Bessent announced on Friday that the federal government is sanctioning multiple wallets linked to Iran as part of efforts to increase economic pressure on the country amid an ongoing ceasefire. The move came a day after Tether froze $344 mi
GateNews21h ago
US Sanctions Iran-Linked Crypto Wallets; Tether Freezes $344 Million in USDT
Gate News message, April 26 — U.S. Treasury Secretary Scott Bessent announced that the federal government is sanctioning multiple wallets linked to Iran as part of efforts to increase economic pressure on the country. The move follows Tether's decision on Thursday, April 24, to freeze $344 million w
GateNews04-26 03:24
US Sanctions Iran-Linked Crypto Wallets Holding $344M Frozen by Tether
U.S. Treasury Secretary Scott Bessent announced sanctions on multiple wallets linked to Iran as part of President Donald Trump's efforts to increase economic pressure on the country, according to CNN. The move follows Tether's freeze of $344 million in USDT on Tron, which has been linked to
CryptoFrontier04-25 21:06
