Senate Democrats Mobilize Against Controversial Crypto Bill Amid Trump’s Ties to Industry

Washington, D.C. — Senate Democrats are intensifying their opposition to a significant cryptocurrency regulation bill, commonly referred to as the GENIUS Act. Concerns over ties between former President Donald Trump and the cryptocurrency sector have fueled this backlash, placing the legislation’s future in uncertainty as a key procedural vote approaches later this week.

The GENIUS Act aims to establish a comprehensive framework for regulating stablecoins, a specific type of cryptocurrency that is typically pegged to the value of stable assets like the U.S. dollar. Initially, the bill garnered bipartisan support, clearing the Senate Banking Committee in March. However, since then, a series of developments—including a recent multi-billion dollar investment by an Abu Dhabi firm in a Trump family’s crypto enterprise—has raised red flags among Democratic lawmakers.

The investment arrangement, revealed earlier this month, involves the firm purchasing $2 billion worth of stablecoins from World Liberty Financial, a company linked to Trump. This transaction intends to facilitate investment into crypto exchange Binance. In light of this connection, Senate Democrats have pivoted towards legislation that would prohibit elected officials and their immediate families from engaging in crypto transactions, including those involving stablecoins.

Senate Minority Leader Chuck Schumer, representing New York, recently advised Democratic colleagues against committing to support the GENIUS Act until certain changes are made, as reported by sources familiar with the discussions. To date, negotiations between Republican and Democratic senators continue, but a procedural vote is expected on Thursday that requires at least 60 votes to advance.

"I think the purpose of that was really to put Democrats in a bad position and try to force us to vote for it," commented Democratic Senator Ruben Gallego of Arizona, who sits on the Senate Banking Committee. He expressed frustration that Republicans moved forward without adequately considering Democratic concerns regarding anti-money laundering, national security, and consumer protection.

Senator Elizabeth Warren of Massachusetts, who serves as the ranking Democrat on the Senate Banking Committee, has been vocal in asserting that the GENIUS Act does not do enough to prevent potential corruption associated with cryptocurrency dealings by elected officials. In a fact sheet circulated among Senate Democrats, Warren called for stringent restrictions against such financial involvements by government officials, emphasizing the need for ethical governance in cryptocurrency legislation.

“Congress is writing laws that will sharply influence the profitability of stablecoin businesses, and it is crucial that no one’s financial interests—especially those of the President—are prioritized in this process,” Warren stated.

Democrat Senator Jeff Merkley of Oregon has introduced a separate piece of legislation, the End Crypto Corruption Act, aimed specifically at preventing high-ranking officials and their families from profiting from cryptocurrency activities. This bill has gained support from at least ten of his Democratic colleagues, including co-sponsors of the GENIUS Act.

On Wednesday, Senator Bernie Sanders is scheduled to convene a roundtable discussion with cryptocurrency experts to discuss the potential economic implications tied to the GENIUS Act.

Critics of Trump have noted that his family’s ventures into the cryptocurrency market have significantly increased their wealth, with reports indicating it could represent nearly 40% of Trump’s net worth. Trump’s recent crypto activities, including the launch of meme coins, have prompted renewed scrutiny of his ethical standards, especially given the historical backdrop of his administration’s lenient approach toward cryptocurrency regulations.

In response to the mounting criticism, White House spokesperson Anna Kelly emphasized that Trump’s assets are held in a trust managed by his children, which she asserts mitigates any conflict of interest. Kelly highlighted, "Stablecoin legislation should be passed on a bipartisan basis. President Trump is dedicated to making America the crypto capital of the world."

As Democrats prepare to voice their concerns and resist the bill’s passage, Republican support appears to be teetering as well. Some Republican senators, including Rand Paul, Josh Hawley, and John Kennedy, have indicated hesitation toward the bill, citing various reservations.

The unfolding situation surrounding the GENIUS Act demonstrates the complexities and challenges of navigating the rapidly evolving world of cryptocurrency regulation, as lawmakers grapple with emerging ethical considerations and the broader implications for the financial landscape in the United States.

As the debate continues, all eyes will be on Thursday’s procedural vote, which could significantly reshape the legislative landscape for cryptocurrency in the coming months.

Cristina Corujo contributed to this report.