Senate Democrats are urging modifications to the cryptocurrency legislation that is currently under consideration in Congress. This call for change stems, in part, from increasing concerns regarding the Trump family’s potential exploitation of its political connections and President Trump’s influence to benefit from cryptocurrency trading. The urgency of this response escalated after a recent private meeting among Senate Democrats, during which Senate Majority Leader Chuck Schumer advised his colleagues against supporting the so-called GENIUS Act, which has garnered backing from the crypto sector.
For several months, the GENIUS Act seemed poised for approval, receiving bipartisan support and scheduled for a procedural vote in the near future. However, during the aforementioned meeting, Senate Democrats voiced apprehensions that the proposed legislation could directly advantage the Trump family’s cryptocurrency ventures, referencing investigative reports from a prominent news outlet.
Among the issues raised by the senators was the recent deal involving World Liberty Financial, a crypto firm associated with the Trump family, which reportedly secured $2 billion in deposits from an Emirati investment fund linked to the Abu Dhabi government. Senator Jeff Merkley from Oregon remarked, “This is a blatant misuse of influence, a clear conflict of interest, and a significant level of corruption that we have not seen before. It must be addressed.” Senator Elizabeth Warren from Massachusetts also encouraged her fellow Democrats to take a firm stance on this issue, stating that the legislation would facilitate personal financial gain for the president and his family, labeling it as corruption that no senator should endorse.
Such ethical dilemmas have contributed to a growing unease among Democrats regarding the bill. Several senators have highlighted additional concerns, particularly that the legislation lacks adequate safeguards against money laundering activities. Responses from the White House, the Trump Organization, and World Liberty regarding these allegations were not immediately available.
Crypto executives have actively lobbied for the passage of the GENIUS Act, which aims to simplify the process for U.S. companies to engage with stablecoins—cryptocurrencies designed to maintain a consistent value of $1. These stablecoins are favored by traders because their value remains stable compared to the volatility of other digital currencies, making them advantageous for various business transactions. However, a favorable outcome for the crypto industry would also benefit World Liberty, which has recently entered the stablecoin market. The Trump family and their partners are already positioned to capitalize significantly from the stablecoins issued by World Liberty.
This potential financial gain has sparked significant opposition from Democratic lawmakers. During the recent meeting, concerns were raised about Mr. Trump’s conflicts of interest and provisions within the bill that could enable foreign stablecoin companies to circumvent some regulatory measures. A coalition of nine Democratic senators—four of whom previously supported the bill’s advancement from the Senate Banking Committee—announced they would withdraw their support unless substantial revisions were made. They emphasized that the legislation lacked robust measures to combat money laundering and adequately regulate foreign crypto firms, although they did not reference Trump’s business directly.
Senate Republicans require the backing of at least seven Democrats to successfully navigate the bill through procedural obstacles, meaning the emerging opposition could jeopardize the legislation and represent a significant setback for the crypto industry’s legislative goals in Washington. In the 2024 election cycle, crypto companies have invested over $130 million in congressional candidates, including Democrats in competitive races like Senator Elissa Slotkin from Michigan and Senator Ruben Gallego from Arizona. Senator Gallego, who had supported the GENIUS Act, was among the lawmakers expressing concerns about the bill this weekend.
On Monday, Senators Merkley and Warren separately requested that the Office of Government Ethics investigate the growing cryptocurrency business dealings of the Trump family, emphasizing the alarming degree of foreign influence and the risk of a quid pro quo that could threaten national security. Additionally, a similar stablecoin bill is currently under consideration in the House, where Democratic leaders plan to protest Trump’s involvement in the industry by staging a walkout during an upcoming hearing.
Representative Sam Liccardo from California, who advocates for stablecoin legislation, voiced that the recent actions of the Trump family have left crypto executives increasingly frustrated as they push for Congress to finalize the bill. “I’ve been hearing growing concern from leaders in Silicon Valley about Trump intertwining this industry with a scheme that appears to be corruptly managed by his sons,” remarked Liccardo.
Even some Senate Republicans and long-time supporters of crypto have expressed unease regarding the Trump family’s attempts to profit from the sector. “This is my president, but I must admit this situation gives me pause,” stated Senator Cynthia Lummis from Wyoming in a recent interview.
Once skeptical of cryptocurrency, Trump has since embraced digital currencies during his campaign last year, vowing to transform the United States into the “crypto capital of the planet.” In September, he and his sons announced the launch of World Liberty, a business focused on providing its own digital currencies. Upon assuming office, Trump appointed individuals at key federal agencies who are supportive of the cryptocurrency sector and quickly reversed a crackdown initiated by the Biden administration. However, the primary goal of the crypto industry in Washington remains to secure comprehensive legislation that would solidify its position within the U.S. financial framework.
The GENIUS Act gained momentum as the first significant legislative effort from lawmakers. In March, the Banking Committee voted 18 to 6 to advance the bill, with Gallego and four other Democrats voting in favor. It soon became apparent that the stablecoin regulations would have direct implications for Trump’s business interests. Shortly after the committee vote, World Liberty announced its intention to issue its own stablecoin, USD1, which could prove highly profitable for the Trump family.
Companies that issue stablecoins function similarly to banks: they accept deposits from buyers, exchange them for coins, and then invest those deposits to generate yield that the companies retain. Recently, one of World Liberty’s founders revealed at a crypto conference that a venture capital firm backed by the Abu Dhabi government would utilize $2 billion worth of USD1 for a significant industry transaction, effectively directing funds into a business led by the president’s family.
Recent investigative reporting concerning the Abu Dhabi deal and additional conflicts of interest surrounding World Liberty has gained traction in Congress. Senate Democrats have circulated research memos referencing these investigations and criticizing the bill as a means for the Trump family to “corruptly profit from his cryptocurrency schemes.” Representative Maxine Waters even read one of the articles from the investigative report verbatim during a committee hearing last week.
During the Senate Democrats’ meeting, Schumer expressed his concerns regarding provisions in the bill that could potentially permit Tether, a foreign company previously scrutinized by U.S. regulators, to offer stablecoins in the U.S. without adhering to many of the proposed regulations. He urged his colleagues to review classified briefings compiled by the Banking Committee concerning Tether. A spokesperson for Tether did not respond to inquiries regarding these matters.
Senate aides indicated that discussions are ongoing to address the concerns raised by Democrats as lawmakers from both parties, including Senator Kirsten Gillibrand, a co-sponsor of the bill, seek a path forward to advance the legislation. Meanwhile, Trump appears undeterred, having posted an image of himself on his Truth Social platform encouraging his followers to invest in a cryptocurrency named $Trump, which has already generated over $100 million in fees for him and his associates. On Monday night, a super PAC supporting Trump was expected to host a fundraiser at his Trump National Golf Club in Virginia, with crypto executives reportedly asked to contribute $1.5 million each for attendance.
