Senate Democrats Rebel Against Crypto Bill, Citing Trump's Perceived Conflicts of Interest

By Kenneth CorbinSenate Democrats are warning that the Genius Act, the legislative proposal to create a regulatory framework for some digital currencies, is still in need of major improvements. A growing number of them are signaling their opposition as the GOP looks to bring the measure to the floor.The Genius Act, which is strongly supported by the crypto industry, would establish a regulatory system for so-called stablecoins. Their value is pegged to another asset, such as the U.S. dollar, and they aim to maintain a steady price, paving the way for a wider role for crypto in financial transactions.But opposition from Democrats has been mounting, driven in part by reports about the Trump family's launch of a stablecoin, USD1, through its World Liberty Financial venture. That coin is already attracting interest among foreign investors and is seen by critics as a serious conflict of interest. World Liberty Financial earns fees when it's used in transactions.Over the weekend, nine Senate Democrats, including four who had voted to advance the Genius Act out of committee, announced their opposition to the measure as drafted, saying that important issues such as anti-money-laundering provisions, foreign issuance, and national security still need to be addressed."While we are eager to continue working with our colleagues to address these issues, we would be unable to vote for cloture should the current version of the bill come to the floor," the senators said in a joint statement on Saturday, referring to the procedural vote to override a filibuster and limit debate on a bill.Sen. Bill Hagerty (R., Tenn.), the lead sponsor of the bill, responded on X, writing on Saturday: "We must advance legislation that enshrines American leadership in the digital asset space and protects the U.S. dollar for centuries to come. That time is now."He continued with a warning that Democrats must work with Republicans to "make any remaining changes needed in a bipartisan way, or show that digital asset and crypto legislation remains a solely Republican issue."Reached for comment on Tuesday, the White House dismissed suggestions that the president's crypto activities create conflicts of interest and called on lawmakers to work together on the stablecoin bill."Stablecoin legislation should be passed on a bipartisan basis," Deputy Press Secretary Anna Kelly says in an email. "President Trump is dedicated to making America the crypto capital of the world and revolutionizing our digital financial technology. His assets are in a trust managed by his children, and there are no conflicts of interest."U.A.E. deal. Democratic Sens. Jeff Merkley (Ore.) and Elizabeth Warren (Mass.) are highlighting a recently announced deal between a United Arab Emirates investment firm and the crypto exchange Binance, using the World Liberty Financial stablecoin to complete the transaction. The two lawmakers have asked the director of the Office of Government Ethics to investigate potential legal issues with the deal, such as violations of the Constitution's Emoluments Clause and bribery statutes."The opportunities for grift — in which the Trump administration offers favors to the U.A.E. or to Binance in exchange for their massive payouts — are mind-boggling," they wrote.Warren took the matter further in remarks on the Senate floor on Monday, warning, "The biggest corruption scandal in modern history is unfolding right now and no one is paying attention to it," according to a copy of her prepared remarks. "Trump has created the opportunity to trade presidential favors like tariff exemptions, pardons, and government appointments for crypto purchases that will directly benefit himself and his family. And no one needs to speculate on what might happen — all of this is now happening in full view of the public."Warren called for changes to the Genius Act that would explicitly bar public officials from making money from stablecoin ventures and prohibit businesses and foreign governments from paying bribes to the president. She is also seeking consumer safeguards, national-security provisions to ensure stablecoins don't finance terrorists, rogue states, or other bad actors, and guardrails to prevent a stablecoin collapse from triggering a broader economic meltdown.This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.