U.S. Senator Cynthia Lummis said a recent lawsuit tied to the freezing of stablecoins has exposed what she described as a dangerous gap in the crypto sector’s ability to combat illicit finance. In her statement, Lummis said exchanges and issuers can face litigation risk if they suspect illegal activity but move to freeze stablecoins. She argued that this leaves market participants in a difficult position when trying to act against suspected unlawful transactions. Lummis pointed to Section 305 of the Clarity Act as a remedy. According to her, the provision gives issuers and exchanges the authority they need to move quickly to stop illicit financial activity without taking on civil liability. Her remarks were posted publicly and framed the recent lawsuit as an example of a broader policy problem in current crypto enforcement and compliance practice.
U.S. Senator Cynthia Lummis said a recent lawsuit has highlighted what she called a dangerous gap in the crypto industry’s efforts to combat illicit finance.
According to Lummis, exchanges and issuers currently face litigation risk if they suspect illegal activity and seek to freeze stablecoins.
She said Section 305 of the Clarity Act gives issuers and exchanges the authority needed to act quickly against illicit financial activity without incurring civil liability.
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