(WASHINGTON) — The Trump administration on Tuesday filed an emergency petition with the U.S. Supreme Court seeking to lift what it called “onerous” due process procedures imposed by a federal judge for immigrants slated for deportation to a third country other than their own.
Solicitor General John Sauer told the court in the filing that a nationwide mandate issued last week by Judge Brian Murphy of the District Court of Massachusetts has created a “diplomatic and logistical morass” that is imposing “significant and irreparable harm” on the government’s efforts to remove criminal aliens.
After a group of detainees said to be headed to South Sudan sued over their alleged inability to raise fears of torture, Judge Murphy issued a preliminary injunction halting any future removals unless detainees were given notice of their destination, at least 10 days to raise concerns for their safety, and 15 days to contest an adverse finding by an immigration officer.
The temporary order applies universally to any individual slated for removal to a third country. The government is required under international law to ensure that migrants in its custody are afforded protections under the Convention Against Torture, of which the U.S. is a signatory. The Trump administration insists it has been in compliance.
“Based on what I’ve learned,” Judge Murphy said during a hearing last week, “I don’t see how anybody could say that these individuals had a meaningful opportunity to object. If I was in any of those groups and I was going to be deported to South Sudan, I would need an opportunity to investigate that and to be able to articulate a well-founded fear about why being returned to South Sudan would be would result in torture or death. The department did not do it. In this case, they did not offer any opportunity to object.”
Sauer told the justices Murphy’s move exceeds his authority, “jeopardizes the public interest,” and has upended sensitive diplomatic and national security negotiations with third countries. He said all of the detainees to be removed have already received adequate due process and had final orders for removal entered.
“The district court’s invented process offers little but delay. While certain aliens may benefit from stalling their removal, the Nation does not,” he wrote.
As part of its aggressive push to remove unlawful or criminal immigrants, the Trump administration has pursued third-country partners willing to accept those who will not be taken back by their home countries.
Hundreds of migrants in recent months have been sent by the U.S. to the CECOT prison in El Salvador even though they are not Salvadoran nationals. The administration has also sought removals to several African nations.
The Supreme Court — increasingly thrust to the center of escalating disputes over aspects of Trump’s immigration policy — has unanimously ruled that all non-citizens on U.S. soil must be afforded “due process of law”
“Detainees are entitled to notice and opportunity to be heard appropriate to the nature of the case,” the justices unanimously stated last month in a per curiam (unsigned) opinion.
The specifics, however, remain contested. Legal scholars say the type of “notice” and “hearing” historically afforded depends on an immigrant’s status and circumstance, such as whether they had been lawfully admitted to the country in the first place, have deep ties to the community, or are seeking asylum.
The court is also currently weighing the ability of individual federal judges to issue binding nationwide orders, blocking the government from executing a policy. After Trump issued an executive order ending birthright citizenship — and three district court judges issued injunctions against it — the administration asked the high court to issue definitive guidance the matter. A decision is imminent.
(WASHINGTON) — The State Department is ramping up efforts to dissuade Americans from traveling to Venezuela after revealing on Tuesday that the country is unjustly imprisoning more Americans than any other country.
“There are more U.S. citizens being held in prisons in Venezuela than any other country,” said Adam Boehler, the Trump administration’s special presidential envoy for hostage recovery.
“And these are not people that did anything wrong,” he continued. “Their only issue is that they are American. Venezuela takes more Americans than any other country for that sole reason.”
While the State Department has not revealed exactly how many U.S. citizens are behind bars in Venezuela, at least eight Americans are known to be detained in the country.
The State Department has classified Venezuela under its most severe travel advisory, “Level 4: Do Not Travel,” since February 2019. But on Tuesday, the U.S. embassies in Colombia, Guyana, Brazil and Aruba and the State Department’s Venezuela Affairs Unit reissued the warning in an attempt to reach more Americans.
“There is no safe way for Americans to travel to Venezuela,” a State Department spokesperson said. “U.S. citizens, dual nationals, and lawful permanent residents should avoid travel to Venezuela at all costs. No trip is worth the price of freedom.”
Americans often travel to Venezuela with loved ones or partners’ families or to see them. However, these loved ones face similar risks as their American contacts.
“Family members and partners of U.S. nationals are often detained alongside the American traveler. Visiting Venezuela puts other people at risk,” the official added.
The State Department is also warning U.S. nationals that in some cases, even close proximity to the Venezuelan border has led to detention by the country’s government.
That’s what happened to Lucas Hunter, a 37-year-old dual American and French citizen who was captured by the Venezuelan government in January while on a windsurfing trip in Colombia.
Hunter’s family said he never intended to visit Venezuela but that he was coerced across the border by the country’s border guards.
Although Hunter remains in Venezuelan custody, the Trump administration has successfully negotiated the release of seven other Americans.
In January, the Trump administration’s Special Presidential Envoy for Special Missions Richard Grenell made an usually high-profile trip to Venezuela, where he met with the country’s authoritarian president, Nicolas Maduro, face to face.
At the end of the visit, Grenell returned to the U.S. with six freed Americans.
Last week, Grenell announced in a post on X that another American detained in Venezuela, U.S. Air Force veteran Joseph St. Clair, had been released. The Trump administration has said it has offered no concessions to the Maduro regime in exchange for freeing U.S. nationals.
“That should continue. It needs to continue,” Boehler said of the releases during an interview with ABC News. “Every country in the world needs to know you can have no relationship with the United States if you are holding U.S. citizens.”
(NEW YORK) — The third week of testimony in Sean “Diddy” Combs’ sex trafficking trial resumed on Tuesday with emotional testimony from the rap mogul’s former personal assistant, who testified about the violence and threats she said she witnessed on the job.
Crying at points on the witness stand, Capricorn Clark told jurors that she was told she would be “thrown into the East River” if she failed a lie detector test about the theft of Combs’ jewelry, that she was forced to accompany Combs to confront rival musician Kid Cudi, and how she witnessed Combs beat his ex-girlfriend, Cassie Ventura.
The intense testimony was complicated by an emotional cross-examination, as defense attorneys questioned Clark about her desire to reconcile with Combs and continue working with him.
“You want to work with him again?” defense attorney Marc Agnifilo pressed after showing messages where Clark sought to reconcile with Combs.
“I wanted to work in the music industry,” Clark replied.
Combs faces the possibility of life in prison if convicted on sex-trafficking and racketeering charges. Prosecutors allege he used his music empire — including his vast wealth and control over his employees — to run a criminal enterprise that used violence and threats to coerce women into sex and then enforce their silence. The trial has already seen the onetime cultural tastemaker and music industry titan reduced to a drug-addled abuser who led a sex life replete with voyeurism, orgies and prostitutes.
Combs has pleaded not guilty, and his lawyers have argued that Combs’ actions, while outside the mainstream, were a private matter and not criminal in nature.
“If you don’t convince him, I’m going to kill all you m————-.”
Last week, rapper and actor Kid Cudi — whose legal name is Scott Mescudi — told jurors that he believed Combs broke into his home in a spasm of jealousy after he learned Mescudi had been dating Combs’ ex-girlfriend, Ventura.
Mescudi offered few details about the alleged break-in, telling jurors he rushed over to his home after being tipped off by Clark. Once there, he testified he only found traces of Combs’ alleged actions, including finding Christmas gifts tampered with and his dog locked in his bathroom.
Taking the stand on Tuesday, Clark testified about that episode, which she said began in the early morning hours of Dec. 22, 2011, when a furious Combs arrived at her apartment with a handgun.
“He said, ‘Why didn’t you tell me?’ I said, ‘I don’t know what you’re talking about.’ He said, ‘Who is Scott?’ I said, ‘I don’t know Scott.’ He said, ‘Kid Cudi,'” Clark recalled.
When she protested, Clark testified Combs, gun allegedly in hand, told her, “I don’t give a f— what you want to do, go get dressed.”
Clark said she was forced to join Combs and a bodyguard named Ruben to drive to Mescudi’s home. While Combs and Ruben allegedly entered the house, Clark said she called Ventura to tell her about the break-in, warning Mescudi that he might “get himself killed” if he tried to intervene.
Later that day, Clark testified that Combs ordered her and the bodyguard to pick up Cassie and convince Mescudi not to tell police Combs was involved in the break-in at the house.
“If you don’t convince him, I’m going to kill all you m————-” Clark recalled Combs telling her. When she returned with Ventura, Clark said Combs, standing in his robe and underwear, began kicking Ventura.
She testified that Combs kicked Ventura repeatedly, “and each kick she would crouch into more and more a fetal position” until she was all the way to the street.
Asked why she did not intervene, Clark responded that Combs told her, “If I jump in, he was going to f— me up too.”
Breaking down on the witness stand, Clark told jurors she later called Ventura’s mother and urged her to report Combs to the police. “He’s beating the s— out of your daughter. Please help her. I can’t call the police, but you can,” she recounted to the jury.
Ventura’s mother testified last week that after she learned about Combs’ threat to release two sex tapes of her daughter, she took out a home equity loan to pay Combs $20,000, which was eventually returned to her.
Cross-examining Clark, Combs’ attorneys tried to cast doubt on the former assistant’s recollection of the events and suggested she accompanied Combs and Ruben willingly.
“You went because you were afraid he was going to do something stupid?” Agnifilo asked. “I went because he told me he didn’t care that I didn’t want to go,” Clark responded. “I did not want to go and it was not my choice, sir.”
“They’re going to throw you in the East River.”
Clark told jurors that working for Combs was fast-paced, intense and required loyalty. Within her first year working for Combs, she said she was forced to take a series of lie detector tests to prove she was not involved with the disappearance of three pieces of high-end jewelry Combs had given her.
After she reported the jewelry missing, Clark testified that she was locked inside the unfinished corporate headquarters of Combs’ Bad Boy Entertainment by a bodyguard nicknamed “Uncle Paulie.” Taken to the sixth floor of the building, Clark said she found “a heavy-set gentleman who was chain-smoking cigarettes and drinking black coffee.” She said the man told her, “I had been brought to the building to take a lie detector test to figure out what happened to this jewelry.”
If she flunked the test, she testified that the man told her, “They’re going to throw you in the East River.”
“I was petrified,” Clark said.
Clark said “Uncle Paulie” took her five days in a row to the same deserted location inside 1710 Broadway in Manhattan, near New York’s famous Carnegie Hall, for lie-detector tests.
“I wanted to prove my innocence. I didn’t like the threats,” Clark testified.
When she was allowed to return to work, Clark told the jury that Combs never mentioned the lie detector tests or inquired where she had been.
During a cross-examination that hopscotched from time period to time period, Capricorn Clark testified she did not know the connection between Sean Combs and the large man she remembered repeatedly administering the lie-detector test. She testified that Combs suspected her of stealing the jewelry, which had been loaned to Combs for his famous annual July 4 white party in the Hamptons.
“You don’t know what relationship he has to Mr. Combs?” defense attorney Marc Agnifilo asked. Clark responded that she did not know.
“I felt that I was somewhat of a protector for Puff.”
While prosecutors sought to use Clark’s testimony to highlight how Combs used his wealth, power, and employees to lead a criminal enterprise, defense attorneys attempted to undercut that narrative by highlighting messages that suggested Clark was eager to work for a man who held a singular position atop the worlds of music and culture.
Clark again broke down in tears and sobs when confronted by several emails she had sent to Combs. One, in 2014, said, “Hopefully you’ll forgive me soon. It’s been long enough. I feel like you’ve forgiven everyone else but me.”
A second one, in early 2015, said, “Sending you blessings and love for a new year.”
More tears flowed when Agnifilo showed Clark an email she sent to Combs on his birthday, Nov. 4, 2015. “My hope for this year is that you make good on your promise to get over things and actually be my friend again.”
Defense attorney Agnifilo kept asking why she wanted to work with Combs again.
“I wanted my life back, sir,” Clark explained.
“You want to work with him again?” Agnifilo asked.
“I wanted to work in the music industry,” Clark replied.
Federal prosecutors, resuming their questioning after the cross-examination, suggested Clark returned to work for Combs because he stymied her attempts to work elsewhere in the music industry.
“He held all the power as it related to me,” Clark testified through sobs.
Richard Ducree/USA Network/NBCU Photo Bank/NBCUniversal via Getty Images
(WASHINGTON) — President Donald Trump will pardon reality TV stars Todd and Julie Chrisley, according to a video posted by Trump’s communications adviser Margo Martin on X. The couple was sentenced to prison for tax evasion and bank fraud.
According to the video, Trump called Savannah Chrisley, the couple’s 27-year-old daughter, to share the news that her parents were getting pardoned and would be released from prison soon.
Savannah Chrisley appealed to the Trump administration for pardons for her parents and spoke at the 2024 Republican National Convention.
The couple, who became famous for their show “Chrisley Knows Best,” were sentenced in November 2022 to a combined 19 years in prison on charges including fraud and tax evasion. Todd Chrisley was sentenced to 12 years in prison and 16 months of probation while Julie Chrisley was ordered to serve seven years in prison and 16 months of probation.
The couple was also ordered to pay $17.8 million in restitution.
Asked by ABC News if the White House could provide any background information regarding the pardons, principal deputy press secretary Harrison Fields did not provide any details behind the pardons and echoed Trump’s comments in the video that the couple were treated unfairly.
“The President is always pleased to give well-deserving Americans a second chance, especially those who have been unfairly targeted and overly prosecuted by an unjust justice system,” Fields said in a statement to ABC News. “President Trump called Savannah and her brother from the Oval Office to personally inform them that he would be pardoning their parents, Todd and Julie Chrisley, whose sentences were far too harsh.”
“Chrisley Knows Best” premiered in 2014 and followed the lavish lifestyle of wealthy real estate developer Todd Chrisley and his family.
The charges against the Chrisleys stem from activity that occurred at least as early as 2007, when the couple allegedly provided false information to banks and fabricated bank statements when applying for and receiving million of dollars in loans, according to the U.S. Attorney’s Office. In 2014, two years after the alleged bank fraud scheme ended, the couple is accused of fabricating bank statements and a credit report that had “been physically cut and taped or glued together when applying for and obtaining a lease for a home in California.”
In their sentencing memo, prosecutors said the Chrisleys had engaged in a “fifteen-year fraud spree.”
“After they defrauded community banks out of tens of millions of dollars, they hid millions of dollars from the IRS, all while going on television to boast about how much they spend on designer clothes,” the memo read. “And when they learned that they were under investigation for those crimes, they involved their own family members and friends to obstruct justice.”
In a phone interview with ABC News on Tuesday, Savannah Chrisley told ABC News the call from Trump came ‘totally out of the blue.”
“I kind of had gotten to a place where I had lost hope, and just felt like nothing was going in my favor,” she said. “And then I got the call.”
Savannah Chrisley said she is planning to pick her parents up as early as Tuesday night or “first thing” on Wednesday.
She also recounted informing her mother by phone of the pardon.
“Just sobbing, hysterically,” Savannah Chrisley said of her mother’s reaction to hearing the news.
Chrisley said she was “eternally grateful to [Trump’s “pardon czar”] Alice Johnson and the president and his entire team.”
“It was just a shock, and the president was so kind and loving. He’s the reason my family is coming back together,” Chrisley said. “I have always stood by him and his administration, and I will continue to stand by them and fight for them.”
-ABC News’ Olivia Rubin contributed to this report.
(WATERBURY, CT) — Five people were shot at a Connecticut shopping center on Tuesday, police said.
Officers responded to the Brass Mill Center in Waterbury at approximately 4:40 p.m. following reports of a “disturbance,” Waterbury Police Chief Fernando Spagnolo said during a press briefing. They found several victims suffering from gunshot wounds, he said.
The victims were transported to local hospitals for medical treatment. There are no fatalities at this time, according to Spagnolo.
A person of interest was identified by detectives and taken into police custody Tuesday evening, Waterbury Police said in a statement.
It wasn’t immediately clear if the person of interest was one of the five injured.
The shooting was not a random act of violence, Spagnolo said, adding, “We believe this started as a conflict and it escalated.”
Police believe the suspect and victims knew each other. A semi-automatic pistol was used in the shooting, the chief said.
State police and federal agencies are assisting in the investigation, including clearing the mall and collecting digital evidence, the chief said.
“There’s a tremendous amount of law enforcement here right now,” Spagnolo said. “We’re following some very strong leads.”
Spagnolo said he does not believe there’s any threat in the immediate area.
Lea Suzuki/The San Francisco Chronicle via Getty Images
(LAS ANGELES) — A violent break-in occurred at the California home of Beanie Babies mogul Ty Warner that left a woman in a coma, officials said.
A Nevada man now faces multiple charges, including attempted murder, in connection with the home invasion and assault, according to the Santa Barbara County District Attorney’s Office.
The incident unfolded on May 21 at the Montecito home of Warner, according to court filings obtained by ABC News.
The suspect — 42-year-old Russell Maxwell Phay of Henderson, Nevada — was taken into custody “after violently attacking a stranger inside a private residence and barricading himself from deputies,” the Santa Barbara County Sheriff’s Office said.
Deputies responding to the residence found the victim with “severe injuries” outside and, following a search of the residence, the suspect barricaded in an upstairs bathroom, the sheriff’s office said.
“The suspect attempted to flee by climbing out of a second-story bathroom window,” the sheriff’s office said in a press release. ” He jumped to the ground where he was apprehended by deputies and a Sheriff’s K9.”
The victim — identified in the criminal complaint as L. Malek-Aslanian — was transported by ambulance to a local hospital. The attack left her “comatose due to brain injury,” the complaint stated.
The complaint alleges that Phay entered the home with the intent to burglarize it, then held Malek-Aslanian against her will and assaulted her, causing great bodily injury. The victim was “particularly vulnerable,” the complaint stated.
Investigators do not have any indication that the victim or suspect knew each other, authorities said.
The homeowner was identified in the complaint as T. Warner. The Santa Barbara County District Attorney’s Office confirmed that to be Ty Warner.
Phay was charged Friday with first-degree attempted murder with premeditation and deliberation, residential burglary, kidnapping, assault and resisting a peace officer, the district attorney’s office said. He is additionally charged with special allegations for personally inflicting great bodily injury resulting in a coma.
Phay has pleaded not guilty to his charges. His bail has been set at $1 million.
He is scheduled to appear in court for a preliminary hearing on June 2. Attorney information was not immediately available.
(LONDON) — Hundreds of Ukrainian drones crossed into Russia overnight into Wednesday morning, dozens of which targeted Moscow and again caused disruption to flights in and out of the capital, according to officials there.
Russia’s Defense Ministry said its forces shot down 296 Ukrainian drones over 12 regions — including the capital Moscow — during the latest round of long-range strikes.
Moscow Governor Andrei Vorobyov said on Telegram that at least 42 drones were downed over the region. Vorobyov reported damage to three homes in the town of Chekhov around 40 miles south of the capital.
Moscow’s Sheremetyevo International Airport — one of four international airports in the capital — also warned travelers of delays due to flight restrictions imposed during the latest drone attack. Recent weeks have seen regular disruptions to Moscow’s airports during such strikes.
Andriy Kovalenko, the head of the Counter-Disinformation Center operating as part of Ukraine’s National Security and Defense Council, said on Telegram there were “some pretty good hits” during Tuesday night’s attack.
Among the targets were the Dubna Machine-Building Plant — involved in the production of aviation, missile and drone technology, Kovalenko said — in the city of Dubna, around 70 miles north of Moscow.
Kovalenko said the Technopark ELMA-Zelenograd facility — which hosts the development of microelectronics, IT, robotics and medical equipment — was also targeted. The facility “is one of the centers where import substitution of critical components previously imported from the West takes place,” Kovalenko said.
ABC News could not immediately verify Kovalenko’s claim of successful strikes on the facilities.
Russia continued its own long-range attacks on Ukraine overnight. Ukraine’s air force said Moscow launched six missiles and 88 strike drones into the country, of which 71 drones were shot down or otherwise neutralized. The air force said it recorded impacts in eight locations.
The intensity of strikes by both sides have only increased since President Donald Trump’s return to office in January, the president having promised to end Russia’s war on its neighbor war in 24 hours. Trump has not delivered on that promise, and his frustration appears to have been building in recent weeks with the continued failure of U.S.-led ceasefire efforts.
Trump called Putin “absolutely crazy” in a Sunday social media post, then on Tuesday said Putin “doesn’t realize is that if it weren’t for me, lots of really bad things would have already happened to Russia, and I mean REALLY BAD. He’s playing with fire!”
The U.S. and Ukraine are now waiting for Russia to deliver its peace memorandum — a document promised by Putin to Trump during a phone call between the two leaders earlier this month. Russia’s Foreign Ministry spokesperson Maria Zakharova said Tuesday that Moscow was still working on the document.
Ukrainian President Volodymyr Zelenskyy cast doubt on the Russian proposal. “They’ve already spent over a week on this,” he wrote on social media on Tuesday. “They talk a lot about diplomacy. But when, in the midst of all that, there are constant Russian strikes, constant killings, relentless assaults, and even preparations for new offensives.”
On Wednesday, Andriy Yermak — the head of Zelenskyy’s presidential office — wrote on Telegram, “Russians are masters of empty words.”
(WASHINGTON) — After hearing the news that President Donald Trump will pardon reality TV stars Todd and Julie Chrisley, who served time for tax evasion and bank fraud, their daughter, Savannah Chrisley, in a video on Instagram posted on Tuesday, celebrated the news.
“The president called me personally as I was walking into Sam’s Club and notified me that he was signing paper pardon paperwork for both of my parents,” Chrisley said in the Instagram video. “So both my parents are coming home tonight [Tuesday] or tomorrow [Wednesday], and I still don’t believe it’s real. I’m freaking out — the fact that the president called me.”
“I will forever be grateful for President Trump, his administration and everyone along the way, all of my lawyers, the people who put in countless hours and effort and love for my family to make sure that my parents got home,” the 27-year-old continued.
Chrisley emphasized that her parents now get a “fresh start” thanks to the pardon.
“My parents get to start their lives over… President Trump didn’t just commute their sentences, he gave them a full unconditional pardon. So for that, I am forever grateful,” Chrisley said.
Savannah Chrisley had previously appealed to the Trump administration for pardons for her parents and spoke at the 2024 Republican National Convention.
The couple, who became famous for their show “Chrisley Knows Best,” were sentenced in November 2022 to a combined 19 years in prison on charges including fraud and tax evasion.
Todd Chrisley was sentenced to 12 years in prison and 16 months of probation while Julie Chrisley was ordered to serve seven years in prison and 16 months of probation. The couple was also ordered to pay $17.8 million in restitution.
“Chrisley Knows Best” premiered in 2014 and followed the lavish lifestyle of wealthy real estate developer Todd Chrisley and his family.
The charges against the Chrisleys stem from activity that occurred at least as early as 2007, when the couple allegedly provided false information to banks and fabricated bank statements when applying for and receiving millions of dollars in loans, according to the U.S. Attorney’s Office.
In 2014, two years after the alleged bank fraud scheme ended, the couple is accused of fabricating bank statements and a credit report that had “been physically cut and taped or glued together when applying for and obtaining a lease for a home in California.”
In a phone interview with ABC News on Tuesday, Savannah Chrisley told ABC News the call from Trump came “totally out of the blue.”
“I kind of had gotten to a place where I had lost hope, and just felt like nothing was going in my favor. And then I got the call … It was just a shock, and the president was so kind and loving. He’s the reason my family is coming back together,” Chrisley said. “I have always stood by him and his administration, and I will continue to stand by them and fight for them.”
(NEW YORK) — The GENIUS Act, a cryptocurrency regulation bill making its way through the Senate, has thrust a little-known type of digital asset into the spotlight.
The industry-backed measure establishes rules targeting stablecoins, a form of cryptocurrency pegged to the value of another asset, often the U.S. dollar.
If enacted, the bill could allow such crypto coins to become a mainstream tool for digital payments and investments, proponents say. Critics warn that wider adoption of stablecoins may endanger consumers and the broader economy.
Here’s what to know about crypto coins and how they could impact your finances:
What are stablecoins?
Stablecoins are a type of digital currency backed by another form of currency, like the U.S. dollar or a commodity like gold.
Typically, the issuer of a stablecoin holds at least one unit of reserve currency for every stablecoin. A stablecoin pegged to the U.S. dollar, for instance, is backed by a reserve of dollars that matches the number of coins.
Stablecoins are designed to be less volatile than other forms of cryptocurrency, which experience large price swings in part because digital assets lack inherent value.
Cryptocurrencies – including popular coins like bitcoin and ether – can be highly sensitive to news developments or investor behavior. In turn, such digital currencies pose difficulty for individuals trying to conduct a purchase or sale using digital assets.
“Most crypto assets have nothing behind them – they’re literally annotations on a database or spreadsheet,” Hilary Allen, a law professor at American University who examines stablecoin policy, told ABC News. “Stablecoins have reserve assets linked to the annotations in the database.”
As their name suggests, stablecoins “evolved as a way of keeping a more stable price for crypto assets,” Allen said.
What do stablecoins mean for your finances?
For now, stablecoins function primarily as a tool for crypto investors, but wider adoption could pave the way for their use as a form of digital payment in everyday purchases, some experts said.
Stablecoins offer crypto investors a place to store their profits without converting the gains into fiat currency.
Once a crypto trader finds a new digital asset deemed worthy of investment, the stablecoins can be used to acquire that target cryptocurrency. When the trader wants out of the new investment, he or she can cash out for more stablecoins.
In other words, Allen said, stablecoins amount to a “cash-management tool.”
Some stablecoins offer annual yields for investors, meaning the digital assets also function as liquid assets with stable upside akin to money-market mutual funds, some experts said.
In theory, both dollar-pegged stablecoins and money-market funds can be exchanged for a dollar at any time. That flexibility allows asset holders to earn small gains while retaining the capacity to sell off the asset at any time.
A potential integration of stablecoins into conventional finance could allow them to be used in a manner similar to app- or debit card-based payments, some experts said.
“You wouldn’t need to physically transfer bills,” said Steven Schwarz, a law professor at Duke University who studies stablecoins, who noted the crypto coins could have particular value for cross-border transactions.
“The holy grail would be to find a so-called ‘global stablecoin’ – one that everyone will accept internationally,” Schwarz said.
What are the risks posed by stablecoins?
Critics warn that stablecoins enable illicit transactions, lack consumer safeguards, and pose a threat to the wider financial system.
The fundamental consumer risk in holding a stablecoin stems from the possibility that an issuer will squander the reserve assets used to back the crypto tokens, some experts said.
“The risk is that you may go to the issuer of the stablecoin and say, ‘Please redeem my stablecoin for the underlying reference assets,'” Schwarz said. “And the issuer may be unable to redeem the stablecoin.”
“The issuer may be in bankruptcy or failed to provide the assets in the first place,” Schwarz added.
Wider adoption of stablecoins may coincide with participation by non-bank firms, which may result in assets that lack the protection of federal deposit insurance and the anti-fraud stipulations allowing users to redeem funds spent wrongfully or mistakenly, some experts said.
On a broad scale, such risky practices could pose a risk to the financial system, since asset holders could demand repayment from issuers unable to cover the reimbursements.
Such a scenario could trigger a government bailout or other public policy solution at the expense of taxpayers, Arthur Wilmarth, a law professor at George Washington University, told ABC News.
“These issuers could be in trouble during a crisis,” Wilmarth said. “It may require a massive bailout.”
Stablecoins, meanwhile, account for about 3 of every 5 illicit cryptocurrency transactions, blockchain data firm Chainalysis found in January.
“They’re used for money laundering and sanctions evasion – that type of thing,” Allen said.
Some critics say the risks posed by stablecoins are exemplified by conflict-of-interest concerns raised by President Donald Trump’s dealings in the crypto tokens.
In March, Trump-backed crypto firm World Liberty Financial issued a stablecoin USD1. An Abu Dhabi-based investment firm earlier this month used the stablecoin to make a $2 billion investment in crypto exchange Binance, putting Trump’s company in a position to profit from the deal. Trump has denied any wrongdoing.
(NEW YORK) — A federal judge has temporarily blocked the Trump administration’s efforts to force New York City to end its congestion pricing program.
Judge Lewis Liman granted a temporary restraining order on Tuesday barring the Trump administration from withholding “federal funds, approvals, or authorizations from New York State or local agencies to enforce compliance” with its demands to terminate the tolling program. The order is in effect until June 9.
The development comes after the Metropolitan Transportation Authority, which operates the toll program, sought a preliminary injunction to prevent the federal government from withholding approvals or funds for continuing to collect tolls after the U.S. Department of Transportation reversed course and pulled federal approval of the congestion pricing program earlier year.
In his order, Liman said the Department of Transportation and Federal Highway Administration are “temporarily restrained from taking any action” to implement or enforce compliance after rescinding federal approval of the toll program.
New York Gov. Kathy Hochul lauded the judge’s order as a “win” for New York in the battle over congestion pricing, saying it blocks the Trump administration from “retaliating against New York” for continuing the program, which is the first of its kind in the nation.
“Judge Liman’s temporary restraining order is a massive victory for New York commuters, vindicating our right as a State to make decisions regarding what’s best for our streets,” Hochul said in a statement Tuesday. “New Yorkers deserve to control our own traffic patterns, keep gridlock off our streets and protect our clean air. We need to make the massive investments necessary to support our transit system and prevent it from falling into disarray and disrepair. Congestion pricing is the right solution to get us there.”
“Congestion pricing is legal, it’s working and we’re keeping the cameras on,” she added.
The Department of Transportation pulled federal approval of the congestion pricing program on Feb. 19, weeks after it went into effect, following a review requested by President Donald Trump. Transportation Secretary Sean Duffy said at the time that the “scope of this pilot project as approved exceeds the authority authorized by Congress” under the Federal Highway Administration’s Value Pricing Pilot Program while calling it “backwards and unfair.”
The MTA immediately challenged the Trump administration’s reversal in federal court, seeking a declaratory judgment that the DOT’s move is not proper. Hochul and MTA Chair and CEO Janno Lieber have said they will not turn off the tolls without a court order.
Duffy extended a deadline for New York to end the collection of the toll multiple times, most recently warning last month that the Federal Highway Administration would take actions to “remedy New York’s noncompliance,” such as withholding approvals or funds for other transportation projects,” starting on May 28 if it didn’t cease congestion pricing.
Duffy has not publicly commented on the judge’s order Tuesday.
In a response to the MTA’s motion seeking a preliminary injunction, Duffy’s counsel argued the request should be denied because New York cannot show irreparable harm “because of the premature nature of this entire dispute” over the proposed compliance measures. “Critically, FHWA has not decided to impose any of these ‘proposed’ or ‘potential’ compliance measures yet,” they wrote.
The congestion pricing plan, which launched on Jan. 5, charges passenger vehicles $9 to access Manhattan below 60th Street during peak hours as part of an effort to ease congestion and raise funds for the city’s public transit system. During peak hours, small trucks and charter buses are charged $14.40 and large trucks and tour buses pay $21.60.
The toll generated nearly $50 million in revenue in its first month and is on track to generate $500 million in net revenue by the end of this year, as initially projected, the MTA said.
