Stablecoin Law: Fraud’s New BFF? 😱

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New York Attorney General Letitia James and her prosecutor pals are here to ruin the party for stablecoin issuers, because apparently the GENIUS Act is less “genius” and more “genie-in-a-bottle-of-fraud.” 🎩💸

According to a letter that’s hotter than a subway platform in August, first spilled by CNN’s Allison Morrow, James and her crew (including Manhattan DA Alvin Bragg, who’s probably juggling this with his other 47 jobs) are calling out the GENIUS Act for being more like the “Oops, We Forgot to Protect Victims Act.” They argue it gives stablecoins a shiny “imprimatur of legitimacy” without bothering to add the necessary guardrails to stop terrorism financing, drug trafficking, money laundering, and cryptocurrency fraud. Because who needs safeguards when you can just call it “genius,” right?

Sure, the law says issuers have to keep reserves, but it conveniently forgets to mention, “Hey, maybe give stolen money back to the people you stole it from?” A small oversight, like forgetting to put on pants before a Zoom call. The prosecutors warn this will basically give issuers a green light to keep their ill-gotten gains, which is great news for fraudsters and terrible news for everyone else. Law enforcement’s job just got harder, and consumer protections? Yeah, they’re about as sturdy as a paper umbrella in a hurricane.

And let’s not forget the stars of this show: Letitia James and her crew are calling out Tether and Circle for being about as helpful as a screen door on a submarine. Apparently, they can freeze suspect funds but choose not to. Cool, cool, cool.

FAQ ❓ (Because We Know You’re Curious)

  • Why are New York prosecutors mad at the GENIUS Act? Because it’s like giving a toddler a chainsaw and saying, “Good luck!” Stablecoins get a gold star without having to return stolen funds. Genius, right?
  • What’s the big risk here? Oh, just fraud, money laundering, terrorism financing, and drug trafficking. No biggie. CNN says this law’s got more holes than a block of Swiss cheese.
  • Who signed this fiery letter? Letitia James, Alvin Bragg, and four other DAs who probably had to Google “stablecoin” before signing.
  • Which issuers are in the hot seat? Tether and Circle, who apparently have the freeze button but prefer to keep it on “chill.”

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2026-02-03 01:57