U.S. Senator Cynthia Lummis said a recent lawsuit against Tether over its freezing of $42.4 million in USDT highlights a regulatory gap in the crypto sector’s efforts to combat illicit finance. According to Lummis, stablecoin issuers and trading platforms can face civil litigation risk when they freeze assets based on suspected illegal activity. She pointed to Section 305 of the Digital Asset Market Structure Clarity Act, saying the provision would give stablecoin issuers and exchanges the authority needed to promptly freeze stablecoins suspected of being tied to illegal activity while shielding them from civil liability tied to those actions. Lummis said the measure would help the crypto industry more effectively block illicit fund flows and address the legal risks issuers and platforms currently face when taking compliance-related action.
U.S. Senator Cynthia Lummis said a recent lawsuit against Tether over its freezing of $42.4 million in USDT highlights a regulatory gap in the crypto industry’s efforts to combat illicit finance.
Lummis said that under the current framework, stablecoin issuers and trading platforms may face civil litigation risk if they freeze related assets based on suspected illegal activity.
Section 305 targets freeze authority and civil liability
She said Section 305 of the Digital Asset Market Structure Clarity Act would grant stablecoin issuers and trading platforms the authority needed to promptly freeze stablecoins suspected of being involved in illegal activity, while allowing them to avoid civil liability stemming from those actions.
Lummis said the provision would help the crypto industry block illicit fund flows more effectively and address the legal risks issuers and trading platforms face when taking compliance measures.
This article was originally published by Bit.Fan. For more cryptocurrency news and market insights, visit www.bit.fan. Disclaimer:
The market information, project data, and third-party content displayed on this platform are for industry information sharing only and do not constitute any form of investment advice or return commitment.
Cryptocurrency trading carries high risks. Users should fully assess their risk tolerance and make independent decisions. All profits, losses, and legal responsibilities are borne by the users themselves.
