TechFlow News, February 2, New York State Attorney General Letitia James, Manhattan District Attorney Alvin Bragg, and three other prosecutors jointly wrote to Congress criticizing the recently passed GENIUS Act for serious flaws. They noted that while the bill establishes a regulatory framework for stablecoins, it fails to require issuers to reimburse fraud victims for stolen funds. The prosecutors specifically named major stablecoin issuers Tether and Circle, accusing them not only of insufficient cooperation with law enforcement but also of profiting from interest earned on frozen funds they hold.
It is estimated that in 2024, each of these two companies earned $1 billion in profits from investments of their reserve funds—including funds backing stolen and frozen stablecoins. Stablecoin transactions now account for 63% of illicit cryptocurrency activity, making them a primary tool for money laundering and fraud.
