USDT’s Future at Stake as Crypto Coalition Battles Bank-Led Yield Restrictions
In a significant development for the stablecoin ecosystem, a broad coalition of 125 cryptocurrency and fintech organizations has launched a forceful pushback against legislative efforts to restrict yield-bearing programs for stablecoins like USDT. Led by the Blockchain Association, the group is contesting provisions within the proposed GENIUS Act that would expand banking industry restrictions on stablecoin rewards. The coalition argues that such measures, championed by traditional banks, are anti-competitive and would unjustly limit consumer choice and innovation in the digital asset space. At the heart of the dispute is the ability of major platforms—including Coinbase and PayPal—to offer interest or rewards to users who hold dollar-pegged stablecoins, a practice that has become a cornerstone of decentralized finance (DeFi) and a key value proposition for everyday crypto adopters. The opposition frames this as a pivotal moment for the future of stablecoins, asserting that allowing traditional financial institutions to dictate rules for digital assets would stifle the very competition that drives technological advancement and financial inclusion. They contend that banks are seeking regulatory protectionism under the guise of consumer safety, aiming to curb the growing popularity of stablecoins as efficient, programmable, and accessible alternatives to traditional bank deposits. For assets like Tether (USDT), the world's largest stablecoin, the outcome of this legislative battle could profoundly impact its utility, adoption trajectory, and integration within both crypto-native and mainstream financial services. The coalition's stance highlights a fundamental tension between legacy finance and the emerging digital economy, with the regulatory treatment of stablecoin yields serving as a proxy for a larger struggle over the future architecture of money and payments. This clash arrives at a critical juncture, as of late 2025, with stablecoins cementing their role as essential infrastructure for crypto markets and cross-border transactions. Restricting yield mechanisms could not only dampen user engagement but also potentially slow the maturation of DeFi protocols that rely on stablecoin liquidity. The crypto industry's unified response signals its readiness for a prolonged advocacy campaign, emphasizing that consumer protection and financial innovation are not mutually exclusive. The resolution of this conflict will likely set a crucial precedent for how decentralized financial products are governed and could either empower or hinder the next phase of growth for leading stablecoins like USDT in the global financial landscape.
Crypto Coalition Pushes Back Against Stablecoin Yield Restrictions
A coalition of 125 crypto and fintech organizations has strongly opposed banking industry efforts to expand restrictions on stablecoin yields under the GENIUS Act. The Blockchain Association-led group argues such measures would stifle competition and consumer choice while protecting traditional banks.
The dispute centers on whether platforms like Coinbase and PayPal can offer rewards programs for stablecoin users—a practice banks already employ for credit cards and other services. 'This isn’t about consumer protection—it’s about protecting banks from innovation,' the coalition stated in a letter to Congress.
The GENIUS Act currently prohibits certain yield-bearing stablecoin products, but some lawmakers seek broader restrictions. Critics warn this could cement bank dominance in digital payments while limiting emerging alternatives.
Crypto Trader Loses $50 Million in Address Poisoning Scam Amid Industry-Wide Security Crisis
A cryptocurrency trader suffered a staggering $50 million loss in USDT due to an address poisoning scam, according to blockchain security firm SlowMist. The victim inadvertently copied a fraudulent wallet address from their transaction history—one that mimicked the intended destination with matching first three and last four characters. The stolen funds were swiftly converted to ETH and dispersed through multiple wallets, with some laundered via Tornado Cash.
The incident underscores a broader security crisis in crypto. November 2025 alone saw $276 million stolen, pushing cumulative industry losses past $90 billion since the sector's inception. The victim's wallet, active for two years primarily for USDT transfers, had withdrawn the compromised funds from Binance shortly before the attack.
Address poisoning scams exploit human error by creating fake addresses with visually similar alphanumeric sequences. This case—involving a transfer to 0xBaFF2F13638C04B10F8119760B2D2aE86b08f8b5 instead of the legitimate 0xbaf4b1aF7E3B560d937DA0458514552B6495F8b5—highlights the critical need for wallet address verification protocols.
Crypto Investor Loses $50M USDT in Poisoned Address Scam
A cryptocurrency investor inadvertently sent $50 million in USDT to a fraudulent address, marking one of the largest single-victim losses in recent memory. The funds were swiftly laundered through decentralized exchanges and Tornado Cash within minutes.
Blockchain security firm SlowMist traced the attacker's movements: the stolen USDT was converted to DAI via MetaMask Swap, then swapped again into 16,690 ETH. Nearly all proceeds—16,680 ETH—were funneled through the privacy mixer Tornado Cash, effectively erasing the money trail.
The victim had initially conducted a small test transaction of 0.005 USDT to the correct address. Twelve minutes later, they mistakenly copied a 'poisoned' address from their transaction history—0xBaFF2F13638C04B10F8119760B2D2aE86b08f8b5—which had been deliberately placed there by the attacker.
Etherscan timestamps show the test transaction occurred at 06:20:35 UTC, with the catastrophic transfer following at 06:32:59. The fraudulent wallet showed two years of dormant activity before springing this carefully laid trap.
