WSJ: Democrats Zero In on Trump’s Crypto Empire
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 leveraging the President's influence to profit from cryptocurrency through issuing stablecoins and partnering with the Abu Dhabi Fund, sparking strong opposition from Senate Democrats. The anticipated passage of the "GENIUS Act" has been obstructed as multiple Democrats are now calling for amendments to the bill or a thorough investigation into potential corrupt behavior, raising concerns about national security and money laundering issues.
Below is the original content (slightly reorganized for readability):
Trump's cryptocurrency transactions have triggered a strong Senate backlash and calls for an investigation.
Senate Democrats are seeking to amend pending congressional cryptocurrency legislation, in part because mounting evidence suggests that the Trump family is leveraging their network and Donald Trump's power to profit from cryptocurrency transactions.
Last week, following a closed-door meeting of Senate Democrats, this opposition escalated further. Senate Democratic leader Chuck Schumer told colleagues during the meeting that they should not commit to supporting the so-called "GENIUS Act"—a bill supported by the crypto industry.
For months, the bill had been expected to pass smoothly with bipartisan support and was scheduled for a procedural vote this week. However, at the meeting, Democratic senators expressed concerns, pointing out that the legislation would directly benefit the Trump family's crypto business, citing reporting from The New York Times.
According to lawmakers, one of the concerns they raised is that a crypto company affiliated with Trump, "World Liberty Financial," had recently struck a deal with a UAE government-backed Abu Dhabi Risk Fund to receive a $2 billion deposit—news that was revealed by The New York Times last week.
"This is a quid pro quo, it's a conflict of interest, it's large-scale corruption we have not seen before," said Senator Jeff Merkley of Oregon in an interview, reiterating his remarks at the meeting. "This behavior must stop."
Massachusetts Democratic Senator Elizabeth Warren also urged other Democrats to take a stand on the issue.
Senator Elizabeth Warren said in a statement, "This Senate bill would make it easier for the President and his family to enrich themselves at the expense of the American people. It is blatant corruption, and no senator should support it."
These ethical concerns have heightened Democrats' broader unease about the bill, with some senators also pointing out other issues, arguing that the bill lacks sufficient anti-money laundering protections.
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The "World Liberty" company did not immediately respond to a request for comment.
White House spokesperson Anna Kelly said Trump has no conflicts of interest because his assets are held in a trust managed by his children. (Nevertheless, Trump still benefits economically from these investments.) Kelly said in a statement, "Stablecoin legislation should be driven by a bipartisan effort. President Trump is committed to making the United States a global cryptocurrency hub and revolutionizing our digital financial technology."
Cryptocurrency industry executives have been lobbying for months to advance the "GENIUS Act." The bill aims to make it easier for U.S. companies to use stablecoins (cryptocurrencies pegged to around $1).
This would be the first time U.S. lawmakers formally establish a regulatory framework for this industry, helping it thrive in the United States. Because stablecoins do not fluctuate as dramatically as other cryptocurrencies, many traders prefer to use them for various commercial transactions.
But this industry-friendly policy will also directly benefit the World Liberty company, expanding the market for its recently launched stablecoin. The Trump family and its partners are poised to benefit, potentially receiving tens of millions of dollars or more in annual income from these stablecoins.
This prospect has sparked strong backlash from Democratic lawmakers.
At last Thursday's meeting, Democrats raised a series of objections to the bill, including concerns about Trump's conflicts of interest and certain wording in the bill that could allow overseas stablecoin companies to circumvent some of the new regulations.
On Saturday, nine Democrats, including four who had previously voted in support of the bill in the Senate Banking Committee, issued a joint statement stating that they would no longer support the bill without significant modifications. They noted that the bill lacked robust provisions to prevent money laundering, lacked regulatory mechanisms for foreign cryptocurrency companies, but did not mention Trump's cryptocurrency business.
Senate Republicans would need at least seven Democratic votes to overcome procedural hurdles for the bill. Therefore, this opposition could lead to the bill's demise, dealing a significant blow to efforts to shape policy for the cryptocurrency industry in Washington.
In the 2024 election cycle, cryptocurrency companies have contributed over $130 million to support congressional candidates, including key Democrats running in districts such as Senators Elissa Slotkin of Michigan and Ruben Gallego of Arizona. Gallego had previously voted for the GENIUS Act in the Banking Committee but also signed onto a statement expressing concerns about the bill over the weekend.
On Monday, Merkley and Warren separately requested the U.S. Office of Government Ethics to investigate the Trump family's expanding cryptocurrency transactions, stating that it "exhibits astonishing foreign influence and potential risks of quid pro quo and national security threats."
A stablecoin bill is also currently under consideration in the House of Representatives. Democratic leaders plan to collectively boycott a hearing on the industry on Tuesday to protest Trump's role in the industry.
California Democratic Representative Sam Liccardo, who supports stablecoin legislation, said the recent actions of the Trump family have left cryptocurrency executives who have long pushed for Congress to pass the bill feeling disillusioned.
"I'm hearing more and more from leaders in the crypto industry in Silicon Valley concerned about Trump dragging this industry into a 'kleptocratic rule' scheme controlled by his sons, which is deeply unsettling," Liccardo said.
Even some Senate Republicans and longtime cryptocurrency proponents have expressed concerns about Trump and his family's attempts to profit from it. "We're talking about my president, but I must say, this does give me some pause," Wyoming Republican Senator Cynthia Lummis told NBC News last week.
Formerly skeptical of cryptocurrency, Trump publicly reversed his stance during last year's election campaign, promising to make the United States the "global capital of crypto." In September of last year, he announced the establishment of World Liberty with his two sons, a company that would issue its own digital currency.
After taking office, Trump appointed a group of crypto-friendly federal agency heads and quickly halted the regulatory crackdown initiated by the Biden administration. The core goal of the crypto industry in Washington is to push for legislation to secure its place 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 voted 18-6 to advance the bill, with five Democrats, including Gale Gago, casting supportive votes. However, it was soon discovered that provisions regarding stablecoins in the bill would directly benefit Trump's business interests. Just about two weeks after the committee vote, World Liberty announced the launch of a stablecoin called "USD1"—potentially yielding substantial profits for the Trump family.
Stablecoin issuers operate similarly to banks: they take in deposits from users, issue tokens, and then invest those funds to earn returns, with the profits belonging to the company.
Just last week, a co-founder of World Liberty announced at a crypto conference that a $2 billion USD1 token supported by the Abu Dhabi government would be used in a major industry transaction—effectively injecting a large sum of money into an enterprise led by the U.S. President's family.
A recent report by The New York Times on the Abu Dhabi transaction and other conflicts of interest of World Liberty quickly spread across Capitol Hill. According to documents obtained by The New York Times, Senate Democrats distributed a research memo last week citing these investigations, fiercely criticizing the legislation as a tool for the Trump family to "corruptly profit through a cryptocurrency scheme." California Representative Maxine Waters even read aloud relevant excerpts from the article during a committee hearing.
At a Senate Democratic meeting, Majority Leader Chuck Schumer expressed concerns about certain wording in the bill. According to congressional aides, he particularly focused on the possibility of the foreign company Tether using the bill to issue stablecoins in the U.S. without having to adhere to many regulatory terms. He urged Democratic lawmakers to carefully review the confidential briefing materials provided by the Banking Committee regarding Tether.
A spokesperson for Tether did not respond to a request for comment. Axios had previously partially covered the contents of this meeting.
A Senate aide said Monday that lawmakers from both parties are continuing to negotiate in response to some concerns raised by Democrats. Several lawmakers, including the co-sponsor of the bill, Democratic Senator from New York Kirsten Gillibrand, are working to find a feasible path to advance the bill.
But Trump shows no signs of backing down. On Monday, he posted an image of a raised fist on his own social media platform, Truth Social, calling on supporters to buy a cryptocurrency named $Trump. This is one of his latest ventures, which has brought in over $100 million in revenue for his family and partners.
Additionally, on Monday evening, a fundraising dinner hosted by a cryptocurrency executive and supporting Trump's Super PAC will take place at the Trump National Golf Club in Virginia, with attendees required to donate $1.5 million each.
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