U.S. Senator: The CLARITY Act should be passed to grant legal protection to stablecoin issuers to freeze funds related to illegal activities

U.S. Senator Cynthia Lummis stated that the recent lawsuit against Tether for freezing $42.4 million in USDT highlights the regulatory gaps in the current crackdown on illegal financial activities in the cryptocurrency industry. She pointed out that stablecoin issuers and trading platforms may face civil litigation risks if they freeze related assets due to suspicions of illegal activities.

Lummis indicated that Section 305 of the "Digital Asset Market Structure Clear Act" would grant stablecoin issuers and trading platforms the necessary authority to promptly freeze stablecoins suspected of being involved in illegal activities while avoiding civil liability as a result.

She believes that this provision can help the cryptocurrency industry more effectively prevent the flow of illegal funds and address the legal risks faced by issuers and trading platforms when taking compliance measures.