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
Tether Freezes $3.29M USDT Linked to Rhea Finance Exploit
Tether froze $3.29 million in USDT linked to Rhea Finance exploit, ensuring user protection and ecosystem trust. Blockchain tracking enabled this action against suspicious wallets after attackers moved funds to evade detection.
GateNews19h ago
Tether 挹注 150M美元救援 Drift Protocol，反觀 Circle 因疏失遭集體訴訟
Drift Protocol faced a $280 million loss due to a hack, prompting Tether to launch a $150 million recovery plan, switching settlement assets to USDT. Meanwhile, Circle faces a lawsuit for failing to freeze stolen funds, highlighting regulatory ambiguities in the crypto industry.
ChainNewsAbmedia23h ago
Former Treasury Secretary Paulson: Contingency plan for a U.S. debt crisis must be prepared in advance; consequences will be very severe
Former U.S. Treasury Secretary Henry Paulson urged U.S. authorities to draw up contingency plans to address a potential collapse in demand for U.S. national debt when he was interviewed by Bloomberg on April 17, 2026 (Thursday). He said that once a crisis erupts, the consequences would be extremely severe. On the same day, the U.S. Department of the Treasury completed the largest debt buyback in a single transaction in history, accepting approximately $15 billion in old bonds maturing from 2026 to 2028.
MarketWhisper04-17 05:08
Drift Protocol Secures $147.5M Funding from Tether to Relaunch as USDT-Based Exchange
Drift Protocol, a Solana-based decentralized derivatives exchange, plans to relaunch as a USDT-based perpetual futures exchange after a $270 million exploit, securing up to $147.5 million in funding from Tether and partners for recovery and operations.
GateNews04-17 01:51
