Lummis Warns Lawsuits Hinder Illicit Finance Fight in Crypto

Senator Cynthia Lummis has expressed concerns that legal uncertainty surrounding stablecoin enforcement could hinder efforts to combat illicit finance in the crypto space. According to her, lawsuits against companies like Tether are blocking progress and creating a difficult choice for exchanges and issuers.

Lummis pointed to a lawsuit filed against Tether over the freezing of $42.4 million worth of USDT as an example. The plaintiffs argue that Tether's actions were unjustified and seek damages, among other things.

The senator believes that Section 305 of the proposed Digital Asset Market CLARITY Act could provide a solution to this issue. This provision would give stablecoin issuers and exchanges clearer authority to act against suspicious transactions while protecting them from civil liability when acting in good faith.