Efforts to pass crypto legislation in the US Senate face mounting resistance amid growing ethical concerns around US President Donald Trump’s ties to crypto.
As Amin Haqshanas reports via CoinTelegraph.com, in a May 5 letter to the Office of Government Ethics, Senators Elizabeth Warren and Jeff Merkley said that Trump and his family stand to personally profit from an investment involving UAE state-backed firm MGX, crypto exchange Binance and World Liberty Financial (WLFI).
The senators called for an urgent probe, warning the deal may violate the US Constitution’s Emoluments Clause and federal bribery statutes.
At the center of the controversy is WLFI’s USD1 stablecoin, reportedly chosen for a $2 billion investment MGX plans to make into Binance.
The senators said the transaction amounts to a potential backdoor for foreign influence and self-enrichment, with Trump’s allies allegedly set to receive hundreds of millions of dollars:
“This deal raises the troubling prospect that the Trump and Witkoff families could expand the use of their stablecoin as an avenue to profit from foreign corruption.”
Further complicating ethics concerns, Trump hosted a $1.5 million-per-plate dinner on May 5 at his golf club in Sterling, Virginia. The event came just days after hosting a $1 million-per-plate fundraiser for the MAGA super PAC.
He also plans to hold a gala dinner with major Official Trump (TRUMP) memecoin holders on May 22, despite multiple US lawmakers expressing concerns.
Source: Elizabeth Warren
Crypto community slams political pushback
Prominent crypto figures are speaking out as political resistance threatens to derail stablecoin legislation in the Senate.
“Elizabeth Warren and Chuck Schumer haven’t learned their lesson,” Tyler Winklevoss, co-founder of Gemini, posted on X.
“If they want Democrats to continue losing elections, they will continue standing in front of crypto legislation like the stablecoin bill which they are stalling out in the Senate.”
Source: Tyler Winklevoss
GENIUS Act faces roadblocks
The Trump family’s controversial $2 billion crypto deal comes as the Senate prepares to vote on the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act and other crypto-related bills.
The fallout is already being felt in Congress. Some Democratic lawmakers are pushing for additional hearings before advancing any legislation, while others question whether Trump’s personal stake in digital assets is undermining bipartisan support for crypto regulation.
On May 5, Senate Majority Leader John Thune signaled a willingness to amend the GOP-backed stablecoin legislation to pass the bill in the coming weeks.
Presently, stablecoins have no federal regulatory system, which lawmakers say would improve investor confidence and enable growth. The GENIUS Act, sponsored by Sen. Bill Hagerty (R-Tenn.), is intended to create such a system and has bipartisan support in the Senate.
However, after announcing they would support the bill, some Democrats withdrew their backing on May 3, citing alleged deficiencies in the bill’s security provisions.
“[T]he bill as it currently stands still has numerous issues that must be addressed, including adding stronger provisions on anti-money laundering, foreign issuers, national security, preserving the safety and soundness of our financial system, and accountability for those who don’t meet the act’s requirements,” wrote the group of senators, led by Sen. Ruben Gallego (D-Ariz.), ranking member of the Senate Banking Subcommittee on Digital Assets.
The group included Democratic Sens. Raphael Warnock (Ga.), Adam Schiff (Calif.), Andy Kim (N.J.), Ben Ray Luján (N.M.), Catherine Cortez Masto (Nev.), Lisa Blunt Rochester (Del.), John Hickenlooper (D-Colo.), and Mark Warner (Va.).
Speaking to reporters, Thune said changes can be made on the floor and that he is waiting to hear what Democrats are asking for, per a report from Politico.
Internal GOP challenges also remain, with Senator Rand Paul expressing uncertainty about backing the bill, according to the report.
The stalling isn’t limited to the Senate. House Financial Services Committee ranking member Representative Maxine Waters plans to block a Republican-led event discussing digital assets on May 6.
The hearing, “American Innovation and the Future of Digital Assets,” will discuss a new crypto markets draft discussion paper pitched by the House agricultural and financial services committee chairs, Representatives Glenn Thompson and French Hill, respectively.
Hagerty, the bill’s lead sponsor, criticized the Democrats’ decision in comments provided to The Epoch Times.
“We cannot allow partisan games to derail the momentum we’ve seen over the past 3 months on this legislation. We have a choice here: move forward or underscore that digital asset and crypto legislation remains solely a Republican domain,” Hagerty wrote.
Hagerty previously stated that the bill is necessary for the U.S. crypto industry to grow as well as ensure the global economic dominance of the U.S. dollar.
“The GENIUS Act establishes a clear, pro-growth, and secure regulatory framework to modernize our payments system and cement U.S. dollar dominance,” wrote Hagerty in a statement about the bill on his website.
The statement explains that the bill would allow institutions to seek licenses to issue stablecoins, define state versus federal boundaries in regulation, and implement reserve requirements.
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