Lummis Says Digital Asset Bill Would Shield Stablecoin Freezes From Civil Liability

U.S. Senator Cynthia Lummis said a recent lawsuit against Tether over the freezing of $42.4 million in USDT highlights a regulatory gap in the crypto industry’s efforts to combat illicit finance. According to ChainCatcher, she said stablecoin issuers and trading platforms may face civil litigation risk if they freeze assets on suspicion of illegal activity. Lummis said Section 305 of the Digital Asset Market Structure Clarity Act would give stablecoin issuers and trading platforms the authority to freeze stablecoins linked to suspected illegal activity in a timely manner while avoiding civil liability. She said the provision could help the crypto industry block illicit fund flows more effectively and reduce legal risks for firms taking compliance measures.