New York prosecutors: Stablecoin regulation bill GENIUS falls short on fraud enforcement
Summary
- New York prosecutors said they warned that the GENIUS Act, a stablecoin regulation bill, is not sufficient when it comes to responding to fraud.
- Letitia James, New York Attorney General, and others said the GENIUS Act provides excessive legal immunity to stablecoin issuers, which could increase the possibility of participating in or aiding and abetting fraud.
- They assessed that Tether (USDT) and Circle have shortcomings in their fraud response and victim-protection policies, while Circle and Tether pushed back by citing the GENIUS Act, AML, and a zero-tolerance policy toward illegal activity.
New York prosecutors in the United States warned that the GENIUS Act, a bill to regulate stablecoins, is not sufficient when it comes to responding to fraud.
According to CNN on the 2nd (local time), New York Attorney General Letitia James and local prosecutors said that "the GENIUS Act provides excessive legal immunity to stablecoin issuers, which could increase the possibility of participation in or aiding and abetting fraud."
They said that in Tether’s (USDT) case in particular, it froze suspicious transactions only selectively, making it difficult for victims to recover funds, and assessed that while Circle also stresses cooperation in responding to fraud, its victim-protection policies are weaker than Tether’s.
In response, Circle said that "the GENIUS Act clearly sets out anti-money laundering (AML) and consumer protection standards," rebutting prosecutors’ criticism. Tether also said it "maintains a zero-tolerance policy toward illegal activity."
JH Kim
reporter1@bloomingbit.ioHi, I'm a Bloomingbit reporter, bringing you the latest cryptocurrency news.![Shock that there is 'no US government backstop'… Bitcoin retreats to the $60,000 level; Ethereum also rattled [Lee Soo-hyun’s Coin Radar]](https://media.bloomingbit.io/PROD/news/b23cb4d1-e890-4f1c-aa52-f18f45dc8192.webp?w=250)
