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Democrats Distance Themselves from Controversial GENIUS Act Amid Allegations of Crypto Corruption
The GENIUS Act, initially celebrated as a bipartisan effort to regulate stablecoins, is facing a significant decline in bipartisan support. Recent revelations concerning World Liberty Financial, a firm linked to Donald Trump, and its potential profit from a $2 billion deal with an Emirati fund have sparked fierce criticism, leading Democrats to label the bill as a vehicle for "crypto corruption".
Senator Chuck Schumer has halted Democratic backing, insisting that no further commitments will be made until measures to address conflicts of interest are firmly in place. Senator Elizabeth Warren has taken a bold stance, advocating for a ban on cryptocurrency holdings among elected officials and their families.
The Underlying Controversy
At the heart of the issue is Trump’s stablecoin project, which has recently surged to a top ten position in market capitalisation. This surge closely follows the announcement of a significant $2 billion (approximately AU$3.11 billion) investment from an Emirati firm, which plans to channel funds into the Binance platform. Alarmingly, 75% of the generated revenue from this stablecoin reportedly funnels directly to entities associated with Trump.
Adding to the contention, a promotional campaign featuring the project reportedly drove up the price of the associated memecoin by over 60%, prompting Democratic lawmakers to perceive the bill as little more than a means of enriching Trump’s financial interests.
Rising Tensions in Congress
Rep. Maxine Waters, a prominent figure in the realm of cryptocurrency oversight, has vehemently opposed the GENIUS Act. She recently blocked a House hearing and staged a counter-hearing to denounce the apparent exploitation by Trump and his family, arguing that the actions of the bill would further legitimise their efforts to profit at the expense of everyday Americans.
"They are legitimising Trump’s and his family’s efforts to enrich themselves on the backs of average Americans," Waters stated.
Ruben Gallego, a Banking Committee Democrat, has echoed similar sentiments, accusing Republicans of hurriedly pushing the bill forward without addressing essential updates regarding anti-money laundering (AML) practices, consumer protections, and national security considerations.
“You can’t try to f*** us and then say, deal with it,” Gallego asserted.
Legislative Impasse
Majority Whip John Thune is currently moving forward with the legislative process, filing for a cloture vote on the GENIUS Act. This vote, scheduled for Thursday, will require a minimum of sixty affirmative votes to proceed. However, Republicans hold only fifty-three seats and have already lost support from three senators within their ranks: Rand Paul, Josh Hawley, and John Kennedy.
Furthermore, nine Democrats have publicly declared their opposition to the latest draft of the legislation, citing undisclosed changes that raise further concerns.
Conclusion
As the controversy surrounding the GENIUS Act unfolds, the implications are significant not only for stablecoin regulation but also for the political landscape surrounding cryptocurrency in the United States. With key lawmakers taking a stand against perceived corruption, it remains to be seen whether bipartisan support for the bill can be salvaged or if it will ultimately falter in light of the growing opposition.
