The Democratic Party criticizes the "GENIUS Act" for being too lenient in regulation, warning that the USD1 and Paxos incident could trigger financial risks.

U.S. Democratic Senator Elizabeth Warren once again criticized cryptocurrency policy on 10/21 and wrote to Treasury Secretary Scott Bessent (, condemning the stablecoin bill “GENIUS Act” signed by Trump as being too lenient. She also cited the financial risks posed by Trump's stablecoin USD1 and the Paxos mis-minting PYUSD incident, calling for the Treasury Department to address the loopholes in the legislation to eliminate conflicts of interest and protect consumer rights.

Trump signs the GENIUS Act, setting a precedent for stablecoin legislation.

The “GENIUS Act” was signed into law by Trump in July of this year and passed through both the House and Senate, becoming the first formal legislation in the United States specifically addressing stablecoins. The main contents include:

Stablecoins must be 100% backed by USD or equivalent liquid assets.

Issuers with a market capitalization exceeding 50 billion USD are required to undergo annual audits.

Establish clear regulations for stablecoins issued abroad.

Currently, multiple regulatory agencies in the United States are formulating detailed execution rules.

The bill is too lenient and requires addressing regulatory loopholes.

Warren wrote to Besant on 10/21, criticizing the passage process of the “GENIUS Act” as too superficial, which may allow crypto banks to continue operating in a regulatory gray area. She emphasized that the Treasury must take action to prevent the new law from triggering risks related to financial stability, consumer protection, taxpayers, and national security.

Warren pointed out that Congress is preparing a more comprehensive cryptocurrency market structure bill, and the Treasury should seize this opportunity for bipartisan negotiations to address the gaps in existing regulations. It is reported that Senate Democrats and Republicans will meet with senior members of the crypto industry on 10/21 to discuss the direction of subsequent legislation.

Not only Warren, but also Federal Reserve director Michael Barr expressed last week that the GENIUS Act still has multiple regulatory loopholes, urging federal banking agencies to collaborate with states to formulate supporting regulations to prevent shocks to the financial system.

From USD1 to Paxos, calling on the Treasury to prevent fraud and loopholes.

Warren pointed out in the letter that the USD1, led by the Trump family, has become one of the major stablecoins globally, raising concerns about “conflicts of political interest” among the Democratic camp. She called on the Treasury Department to propose concrete plans to explain how to avoid political interference in policy and to promote Congress to establish a more rigorous regulatory framework.

At the same time, Warren also cited the incident where Paxos misissued 3 trillion PYUSD, warning that technical errors could jeopardize market trust and financial stability. She called for the Treasury to publicly explain preventative measures and pointed out that if current regulations are insufficient, Congress should be clearly urged to seek the necessary authority to prevent similar risks from occurring again.

)Paxos accidentally minted 300 million USD stablecoin PYUSD, printing three times the global GDP in one click(

Warren warns: Prevent stablecoins from becoming the trigger for financial risks.

Warren emphasized that the “GENIUS Act” currently lacks the key safety mechanisms necessary to prevent stablecoins from shaking the entire financial system.

She urged the Ministry of Finance to address regulatory loopholes, eliminate the transfer of benefits, and enhance the protection of consumer rights during the implementation of the new law and subsequent legislative negotiations, to avoid falling into fraud or systemic risks again.

) Trump signs the “GENIUS Act”: The US stablecoin market enters a new regulatory era, who are the winners? How does USDT survive? (

The article criticizes the Democratic Party for the loose regulation of the “GENIUS Act”, warning that the USD1 and Paxos incident may trigger financial risks. It first appeared in Chain News ABMedia.