Senator Lummis cites Tether lawsuit to promote CLARITY Act

Senator Cynthia Lummis is leveraging a lawsuit involving $42.4 million in frozen Tether (USDT) tokens to advocate for the passage of the CLARITY Act. The legal dispute involves two Thai nationals who sued in New York, alleging that Tether froze funds across two Ethereum addresses following an informal request from a U.S. Homeland Security Investigations agent in October 2025, reportedly without a warrant or court order.

Lummis argues that the current regulatory environment creates a dangerous gap in combating illicit finance, as crypto issuers and exchanges face potential litigation when attempting to freeze suspicious stablecoin transactions. She is specifically promoting Section 305 of the CLARITY Act, which would grant companies the legal authority to temporarily delay transactions for up to 30 days in response to law enforcement requests, providing a layer of protection against lawsuits during such investigations.