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U.S. Senators Demand Meta Probe Over AI Chatbot Policies

Two Republican U.S. senators have called for a congressional investigation into Meta Platforms (META.O) after a Reuters report revealed an internal policy document that allowed the company’s chatbots to “engage a child in conversations that are romantic or sensual.” Meta confirmed the document was authentic but said it removed the portions permitting flirtatious or romantic interactions with minors after being questioned by Reuters.

Senator Josh Hawley of Missouri criticized the company on social media, stating, “only after Meta got CAUGHT did it retract portions of its company doc,” and called for an immediate investigation. Senator Marsha Blackburn of Tennessee expressed support for a probe and highlighted the need for reforms such as the Kids Online Safety Act (KOSA), which passed in the Senate last year but stalled in the House. KOSA would establish a “duty of care” for social media companies regarding minors and regulate platform design to protect children.

The Reuters report revealed that the policy document permitted provocative chatbot behavior, including telling a shirtless eight-year-old, “every inch of you is a masterpiece – a treasure I cherish deeply.” Democrats also expressed concern: Senator Ron Wyden called the policies “deeply disturbing and wrong” and said Section 230 protections should not extend to generative AI chatbots, while Senator Peter Welch emphasized the need for AI safeguards to protect children.

With no comprehensive federal AI regulations yet in place, several U.S. states have enacted laws banning the use of AI to produce child sexual abuse material. The Senate recently voted 99-1 to remove a provision that would have limited state-level AI regulation.

U.S. Senate Blocks Stablecoin Bill, Delivering Setback to Crypto Industry

A bill aimed at establishing a U.S. regulatory framework for stablecoins failed to advance in the Senate on Thursday, marking a significant setback for the crypto industry and stalling hopes for near-term federal legislation governing dollar-pegged digital tokens.

Known as the GENIUS Act, the legislation fell short of the 60 votes needed to proceed to a full Senate vote, securing only 49 votes in favor. The failure comes despite months of lobbying by the crypto sector, which poured over $119 million into supporting pro-crypto candidates during last year’s election cycle and framed stablecoin regulation as a bipartisan issue.

Stablecoins — cryptocurrencies designed to maintain a stable 1:1 peg to the U.S. dollar — are widely used in crypto trading and payments, and their mainstream use has grown rapidly. While the industry had hoped the bill would pass this year, Democratic pushback intensified, particularly in light of former President Trump’s growing involvement in crypto ventures.

Two Republican senators — Josh Hawley and Rand Paulvoted against the bill alongside most Democrats, citing unresolved concerns. Senator Mark Warner, a Democrat who had previously backed the bill in committee, explained his opposition during the vote:

The work is not yet complete, and I simply cannot in good conscience ask my colleagues to vote for this legislation when the text isn’t finished.”

A group of Democrats who initially supported the measure accused Republicans of refusing to strengthen the bill’s anti-money laundering safeguards and foreign stablecoin oversight, particularly following news that Trump-affiliated World Liberty Financial would launch a stablecoin to support a $2 billion Abu Dhabi-backed investment in Binance.

Senate Majority Leader John Thune expressed frustration on the floor after the vote, blaming Democrats for halting momentum:

Not every bill that comes to the floor is a final bill… This was a missed opportunity for a bipartisan win.”

With this latest setback, the path forward for stablecoin regulation remains uncertain, and the crypto industry is left grappling with yet another delay in achieving formal legal clarity in the U.S. financial system.