NY prosecutors say GENIUS stablecoin bill is weak on fraud

New York prosecutors have warned that a stablecoin regulation bill known as GENIUS is inadequate for combating fraud, CNN reported. Attorney General Letitia James and a district attorney argued that the bill could provide legal immunity to stablecoin issuers, potentially increasing their ability to participate in or aid fraudulent activities. They pointed out that Tether has only selectively frozen suspicious transactions involving USDT, making it difficult for victims to recover their funds. They also noted that while Circle positions itself as an ally in fighting fraud, its victim protection policies are less comprehensive than Tether's. In response, Circle stated that the GENIUS bill clarifies standards for anti-money laundering and consumer protection. Tether also rebutted the claims, asserting that it maintains a zero-tolerance policy for illegal activities.