Original Title: Trump crypto deals provoke Senate backlash and calls for investigation
Original Authors: Eric Lipton, David Yaffe-Bellany, The New York Times
Original Translation: zhouzhou, BlockBeats
Editor’s Note: The Trump family is suspected of profiting from cryptocurrency by issuing stablecoins and collaborating with an Abu Dhabi fund, leveraging presidential influence, which has sparked strong opposition from Senate Democrats. The previously promising "GENIUS Act" has been stalled, with several Democrats calling for amendments or a thorough investigation into potential corruption, raising concerns about national security and money laundering issues.
The following is the original content (edited for readability):
Trump's cryptocurrency deals have triggered a strong backlash in the Senate, leading to calls for an investigation.
Senate Democrats are demanding changes to pending cryptocurrency legislation, partly due to increasing evidence that the Trump family is profiting from cryptocurrency trades by leveraging their connections and Donald Trump's power.
Last week, following a closed-door meeting, the opposition intensified. Democratic leader Chuck Schumer told colleagues they should not commit to supporting the so-called "GENIUS Act"—a bill backed by the cryptocurrency industry.
For months, the bill was expected to pass smoothly with bipartisan support and was scheduled for a procedural vote this week. However, during the meeting, Democratic senators expressed concerns, pointing out that the legislation would directly benefit the Trump family's cryptocurrency business, based on reports from The New York Times.
According to lawmakers, one of the concerns raised was that the cryptocurrency company "World Liberty Financial," associated with Trump, recently reached an agreement with an Abu Dhabi government-backed UAE venture fund to accept $2 billion in deposits—news that was disclosed by The New York Times last week.
"This is a form of influence peddling, a conflict of interest, and a scale of corruption we have never seen before," Oregon Democratic Senator Jeff Merkley said in an interview, reiterating his comments from the meeting, "This behavior must stop."
Massachusetts Democratic Senator Elizabeth Warren also urged other Democrats to take a stand on the matter.
Senator Elizabeth Warren stated in a release: "This Senate legislation would make it easier for the president and his family to line their pockets. This is blatant corruption, and no senator should support it."
These ethical concerns have heightened Democrats' broader unease about the bill, with some senators pointing out other issues, arguing that the bill lacks sufficient protections against money laundering.
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"World Liberty" did not immediately respond to a request for comment.
White House spokesperson Anna Kelly stated that Trump has no conflict of interest because his assets are held in a trust managed by his children. (Nevertheless, Trump would still benefit financially from these investments.) Kelly said in a statement: "Stablecoin legislation should be pushed through with bipartisan support. President Trump is committed to making America the global crypto hub and fundamentally transforming our digital financial technology."
Executives in the cryptocurrency industry have been lobbying for months to push the "GENIUS Act" through. The bill aims to make it easier for U.S. companies to use stablecoins (cryptocurrencies that maintain a price around $1).
This would mark the first time U.S. lawmakers formally establish a regulatory framework for the industry, aiding its development in the U.S. Since stablecoins do not fluctuate as wildly as other cryptocurrencies, many traders prefer to use them for various business transactions.
However, this industry-friendly policy would also directly benefit World Liberty, expanding the market for the stablecoins it recently began issuing. The Trump family and its partners are already in a position to earn tens of millions of dollars or more annually from these stablecoins.
This prospect has triggered a strong backlash from Democratic lawmakers.
During last Thursday's meeting, Democrats raised a series of objections to the bill, including Trump's existing conflicts of interest and certain wording in the bill that could allow overseas stablecoin companies to evade some new regulations.
On Saturday, nine Democrats, including four who had previously voted to support the bill in the Senate Banking Committee, issued a joint statement saying they would no longer support the bill unless significant changes were made. They pointed out that the bill lacks strong provisions to prevent money laundering and has insufficient regulatory mechanisms for foreign cryptocurrency companies, but did not mention Trump's cryptocurrency business.
Senate Republicans need at least seven Democratic votes to overcome procedural hurdles for the bill. Therefore, the emergence of this opposition could jeopardize the legislation, posing a significant blow to the cryptocurrency industry's efforts to push policies in Washington.
During the 2024 election cycle, cryptocurrency companies have invested over $130 million in supporting congressional candidates, including Democrats running in key districts, such as Michigan's Senator Elissa Slotkin and Arizona's Ruben Gallego. Gallego had voted to support the "GENIUS Act" in the Banking Committee but also signed a statement expressing concerns about the bill this weekend.
Merkley and Warren separately submitted requests on Monday for the U.S. Office of Government Ethics to investigate the Trump family's expanding cryptocurrency dealings, stating they "exhibit astonishing foreign influence and pose potential risks of quid pro quo that threaten national security."
Currently, there is also a version of the stablecoin bill under consideration in the House. Democratic leaders plan to collectively walk out of a hearing on the industry on Tuesday to protest Trump's role in it.
California Democratic Congressman Sam Liccardo, who supports stablecoin legislation, stated that the recent actions of the Trump family have frustrated cryptocurrency executives who have been pushing Congress to pass the bill.
"I am increasingly hearing from leaders in the crypto industry in Silicon Valley—who are extremely concerned about Trump dragging this industry into a 'thieves' regime' controlled by his sons," Liccardo said.
Even some Senate Republicans and long-time supporters of cryptocurrency have expressed concerns about Trump's and his family's attempts to profit from it. "We're talking about my president, but I have to admit this does give me pause," Wyoming Republican Senator Cynthia Lummis told NBC News last week.
Once skeptical of cryptocurrency, Trump publicly changed his stance during last year's campaign, promising to make America the "global crypto capital." In September of last year, he announced the establishment of World Liberty with his two sons, a company that will issue its own digital currency.
After taking office, he appointed a number of federal agency heads who support the cryptocurrency industry and quickly halted the Biden administration's previous regulatory crackdown. The core goal of the cryptocurrency industry in Washington is to push for legislation to secure its legitimate status in the U.S. financial system.
The "GENIUS Act" became the first bill to gain momentum. In March of this year, the Senate Banking Committee advanced the bill with a vote of 18 to 6, including support from five Democrats, including Gallego. However, it was soon discovered that the bill's provisions regarding stablecoins would directly link to Trump's business interests. Just about two weeks after the committee's vote, World Liberty announced it would launch a stablecoin called "USD1"—which could yield extremely substantial profits for the Trump family.
Stablecoin issuing companies operate similarly to banks: they accept deposits from users, issue tokens, and then invest those funds to earn returns, which belong to the company.
Just last week, a founder of World Liberty announced at a cryptocurrency conference that a venture capital fund backed by the Abu Dhabi government would use $2 billion worth of USD1 tokens for a major industry transaction—essentially injecting massive funds directly into a business led by the family of the U.S. president.
Recent reports by The New York Times regarding the Abu Dhabi deal and other conflicts of interest involving World Liberty quickly spread on Capitol Hill. According to documents obtained by The New York Times, Senate Democrats distributed a research memo last week citing these investigations, vehemently criticizing the legislation as a tool for the Trump family to "profit corruptly through cryptocurrency schemes." California Congresswoman Maxine Waters even read a related article from the newspaper in full during a committee hearing.
During a Senate Democratic meeting, Senate Majority Leader Chuck Schumer expressed concerns about certain wording in the bill. According to congressional aides, he was particularly worried that the foreign company Tether might use this bill to issue stablecoins in the U.S. without having to comply with most regulatory provisions. He urged Democratic senators to carefully review the confidential briefing materials on Tether provided by the Banking Committee.
A spokesperson for Tether did not respond to a request for comment. Axios had previously reported some of the content from this meeting.
Senate aides said on Monday that bipartisan lawmakers are continuing to negotiate in response to some of the concerns raised by Democrats. Several lawmakers, including the bill's co-sponsor, New York Democratic Senator Kirsten Gillibrand, are working to find a viable path to advance the bill.
But Trump shows no signs of backing down. On Monday, he posted an illustration of himself with a raised fist on his social media platform Truth Social, calling on supporters to buy a cryptocurrency called $Trump. This is one of his latest business ventures, which has already brought in over $100 million for his family and partners.
Additionally, on Monday night, a fundraising dinner hosted by cryptocurrency executives for a pro-Trump super PAC will be held at Trump National Golf Club in Virginia, with participants required to donate $1.5 million each.
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