New York Attorney General Letitia James along with four district attorneys have warned that the proposed GENIUS Act could potentially provide legal cover for stablecoin-related fraud, according to CNN.
The prosecutors expressed concerns that major stablecoin issuers like $USDT (Tether) and $USDC (Circle) may be incentivized to selectively cooperate with law enforcement. While these companies can freeze funds, authorities argue this power may be used inconsistently—allowing them to continue profiting while illicit activity goes unchecked.
Officials claim that funds stolen or converted into $USDT are rarely frozen, seized, or returned, creating a serious risk for fraud and money laundering within the crypto ecosystem.
The warning has sparked renewed debate around crypto regulation, especially as lawmakers push forward with the GENIUS Act, which critics say may weaken enforcement rather than strengthen it.
Tokens linked to the broader crypto market, including $ZAMA , $AUCTIOn, and $ZIL, are being closely watched as regulatory uncertainty grows.#ustd
