Senate GOP Tees Up Vote on Crypto Bill Expected to Enrich Trump Family
The president’s growing crypto empire presents serious ethical red flags and may amount to criminal violations of anti-corruption laws.
By Donald Shaw and David Moore, Sludge
Senate Republicans are planning to a hold a vote this afternoon on legislation that could boost President Donald Trump’s latest crypto venture, World Liberty Financial’s USD1, alarming watchdogs who warn that the president’s growing crypto empire—from memecoins to Bitcoin mining—presents serious ethical red flags and may amount to criminal violations of anti-corruption laws.
Sen. John Thune (R-S.D.), the Senate Majority Leader, said on the Senate floor this morning that the Senate will vote on cloture on the GENIUS Act—a bill that would establish a clear, industry-friendly regulatory framework for payment stablecoins, which are digital assets whose values are kept constant through being pegged to fiat currencies. The bill would classify stablecoins as non-securities, shielding them from SEC oversight and giving issuers the choice of federal or state regulation while also setting standards for reserves, redemption rights, and disclosures that could spur mainstream adoption.
Such a regulatory framework could benefit stablecoins like Trump’s USD1, whose creators are hoping to build into a widely-used asset that functions as a bridge between traditional finance and decentralized digital projects. The GENIUS Act passed the Senate Banking Committee in March with bipartisan backing, but its Democratic support has eroded over concerns about the Trump family’s crypto moves.
Over the weekend, nine Senate Democrats who had previously backed crypto industry-friendly legislation said they would not support the bill, including four who voted for it in March during the Banking Committee mark-up: Ruben Gallego (D-Ariz.), Mark Warner (D-Va.), Lisa Blunt Rochester (D-Del.), and Andy Kim (D-N.J.). Then last night, Gallego, Warner, Gillibrand and other on-the-fence Democrats reportedly hashed out a deal with Republicans to win back their support.
The details of the deal are still unknown, but reports indicate that they are seeking to have a vote on adding language to the bill that would ban presidents, executive branch officials, and members of Congress from financially benefiting from, issuing, or endorsing crypto projects, along the lines of a measure they introduced on Tuesday called the End Crypto Corruption Act. Sen. Kirsten Gillibrand (D-N.Y.), a co-sponsor of the bill, said she was “very hopeful” coming out of negotiations last night.
Gallego, who benefited from $10 million in spending by the crypto industry-funded Protect Progress super PAC during his 2024 campaign, is reportedly one of the Democrats currently deep in negotiations to make a deal with Republicans and back the bill. In March, Gallego held a fundraising retreat at a luxury resort featuring crypto investor Marc Andreessen, a Trump megadonor and a top funder of the crypto industry’s super PAC efforts to knock off lawmakers who supported stronger consumer protections. The Silicon Valley firm Andreessen Horowitz has been championing stablecoins as potentially crypto’s first “killer app” and recently invested in a stablecoin company called Zar.
The recent revelation of a $2 billion deal between an Abu Dhabi state-backed investment firm and Binance using World Liberty Financial’s stablecoin has sparked outrage among congressional Democrats, who call it an example of corruption benefiting Trump. Senate Minority Leader Chuck Schumer (D-N.Y.) has urged Democrats not to support the GENIUS Act in its current form, though reports indicate that he is open to backing the bill if anti-corruption measures are added. At least three Republicans oppose the bill, meaning its advancement looks unlikely barring significant revisions.
Launched in March, the value of USD1 in circulation is about $2.1 billion, making it the fifth-largest stablecoin and one of the fastest-growing stablecoin projects. USD1’s market capitalization shot up by about $2 billion on April 29, days before the deal between Binance and the Abu Dhabi firm was announced.
“Currently, people who wish to cultivate influence with the president can enrich him personally by buying cryptocurrency he owns or controls,” said bill sponsor Sen. Jeff Merkley (D-Ore.). “This is a profoundly corrupt scheme. It endangers our national security and erodes public trust in government. Let’s end this corruption immediately.”
Unlike the leading stablecoin Tether, which has been plagued by secrecy and regulatory scrutiny, USD1 is being promoted by WLFI as an “institutional-ready stablecoin” that operates on the transparent Ethereum blockchain, its reserves audited by an independent third party and held in custody by BitGo, a regulated firm backed by Goldman Sachs. This transparent design could give USD1 a first-mover advantage for greater compliance with the GENIUS Act regulations than a project like Tether, though it faces challenges from competitors like Circle, as well as skepticism surrounding Trump’s involvement.
According to WLFI’s “gold paper,” a Trump-linked company called DT Marks DEFI LLC is entitled to receive 75% of the company’s initial token sales, which totaled $550 million. In exchange for his share, Trump agreed to promote WLFI from time to time and allow the company to use his likeness. In addition, Reuters reports that the Trump family is entitled to 60% of revenues from the company's operations, presumably including transaction fees and other forms of profit generated by USD1.
The Trump family’s crypto ventures take conflicts of interest and supersize them, nonpartisan watchdog groups warn. The recently-announced deal for Emirati investment firm MGX to use Trump’s USD1 as the vehicle for its eye-popping $2 billion investment into Binance has captured attention. While details were not released, the size of the investment could yield the Trump family tens of millions of dollars a year in revenue, according to the New York Times. With the new deal, the president’s WLFI created a financial link to Binance, the largest crypto exchange in the world. Binance and its CEO, Changpeng Zhao, pleaded guilty in November 2023 to crimes including money laundering and failure to register as a money transmitting business.
Just days before his inauguration, Trump announced the $TRUMP memecoin, a token of which 80% is owned by the Trump Organization and affiliates, whose sale initially brought in billions. The Trump family and insiders raked in some $100 million in trading fees in under two weeks, a sum that rose to around $325 million as of last month, according to the firm Chainalysis.
Also last month, the memecoin’s value spiked by more than 50% when the president announced a black-tie-optional dinner with the top 220 coin holders—netting gains of around $900,000 for Trump and insiders in two days. Just last week, a Houston-based shipping firm named Freight Technologies announced its plans to snap up $20 million worth of Trump’s meme coin to gain access to influence the president’s tariffs policy.
Watchdogs have flagged a host of other clear-as-day ethics concerns around WLFI’s crypto dealings. For one, the recent deal announcement in Dubai featuring Eric Trump was joined by crypto billionaire Justin Sun, who in January bought up to $75 million worth of World Liberty tokens, then in February got word that the Securities and Exchange Commission was pausing the fraud case against him. Soon after President Trump signed an executive order to establish a Strategic Bitcoin Reserve, his sons launched a Bitcoin mining venture, American Bitcoin, that “aims to become the world’s largest, most efficient pure-play miner while building a robust strategic Bitcoin reserve.”
Earlier that month, the SEC had similarly paused a lawsuit against Binance in a case that accused the exchange of artificially inflating trading volumes, among other violations. Another Abu Dhabi-based firm that bought $25 million worth of World Liberty tokens in April, DWF Labs, has reportedly been the subject of market manipulation inquiries within the crypto industry; the company said it was planning to provide liquidity for USD1.
Public Citizen has alerted federal prosecutors that it believes Trump’s appeals for his memecoin are violations of federal laws preventing the president from soliciting gifts. “As this is not a presidential act, he does not enjoy immunity from prosecution,” the group wrote this week.