The Floundering of the GENIUS Act and the Divided Senators
Crypto Bill in Senate Fails Amidst Partisan Disagreements or Possible Influence of Trump's Digital Wealth?
The crushing defeat of a procedural Senate vote on the GENIUS Act, designed to regulate stablecoins, underscores the troubles plaguing bipartisan cryptocurrency policy. Initially thought to sail smoothly, the bill was sabotaged at the last minute by Democratic protests and a time crunch, despite ongoing discussions with GOP leaders.
A narrow 48-49 vote, with two Republicans jumping ship to side with the Democrats, exposed deepening rifts over process and trust. While both parties advocated for digital asset regulation, the vote reignited questions about whether crypto could remain apolitical in the polarized Senate.
Mart B. confidently shared with our site in March that crypto has all-party backing: "It's a misconception that crypto has become partisan. Many people across the aisle back crypto. I don't see crypto as partisan, just as 'the Internet' isn't. I don't think, in 2025, either party can be 'anti' a technology if they're thinking about America's future."
Yet, if Mart is correct, Democrats view crypto support differently than Republicans. Examining their public statements on crypto regulations and their concerns in the sector, it becomes clear that they aren't in the same camp as the GOP.
Take President Trump's memecoin, Official Trump Trump-0.14%. The profits his family amassed from their DeFi business have emerged as a significant stumbling block in the bipartisan negotiations over stablecoin legislation.
Scott Galloway, a New York University Stern School of Business professor and Raging Moderates podcast co-host, told CNN, "The potential here for corruption is just unmatched."
Democratic Senators felt their Republican colleagues had missed the mark on addressing this issue. Senator Elizabeth Warren even urged the bill to prohibit sitting presidents from profiting from crypto projects-a move targeted straight at Trump, who offered exclusive interactions with his memecoin's top holders.
Crypto in the Biden Era
Throughout President Biden's term, the crypto sector has racked up several milestones. For instance, Coinbase managed to list on NASDAQ, and the crypto-skeptical Securities and Exchange Commission, under Gary Gensler's chairmanship, approved Bitcoin ETFs.
Still, it wasn't enough for the industry's top supporters. SEC commissioner Hester Peirce called the Bitcoin ETF approval process "remarkably mismanaged," telling Bloomberg News that the delays ostracized innovators.
The crypto community grumbled about alleged attempts to debank clients dealing with digital assets, which they claimed were the doing of the FDIC and Department of Justice.
Known colloquially as Operation Choke Point 2.0, this situation was under scrutiny for being an overstep by the former administration, with Trump, Republican Senator Cynthia Lummis, and Fed Chair Jerome Powell questioning its validity.
Gensler, a Democrat, launched numerous lawsuits against the crypto industry during his tenure as SEC chairman. His list included Binance, Coinbase, Gemini, and Genesis, among others. The main issue was that Gensler maintained that most cryptocurrencies were unregistered securities, a status that hampered innovation and is currently seen differently by current SEC officials, who prefer viewing them as collectibles or commodities.
During the Trump era, the SEC dropped many of the charges initially filed under Gensler.
Democrats have stayed cautious about crypto, aiming to foster a careful experiment rather than a free-breathing one to avoid putting anyone at risk. However, this careful approach may cost Democrats votes. Van Jones, a writer and CNN host, stated that Democrats alienate potential supporters when they shun crypto enthusiasts.
Dems and Crypto Today
After intense negotiations, the GENIUS Act, intended to regulate stablecoins in the U.S., failed in the Senate. Most Republicans, eager to push the bill through, disregarded Democrats' plea for more time to prepare.
Many criticized the Democrats for focusing on blocking Republicans rather than supporting the bill. Jeff Park of Bitwise pointed out that the bill wasn't as radical as some made it out to be, with high requirements for stablecoin issuers.
Warren, according to Axios, objected to the GENIUS Act due to a lack of basic safeguards against corruption. She, along with other Democratic leaders, allegedly took note of potential profits Trump's family could reap from their stablecoins used in foreign transactions involving the Abu Dhabi investment fund.
According to Chainalysis, over $1.1 billion in profits have been generated by the top 58 wallets holding Trump's memecoin so far. The majority of small holders (764,000 wallets) have incurred losses instead.
Senator Richard Blumenthal initiated an investigation into Trump's crypto business, requesting records from Fight Fight Fight LLC, a firm behind the Official Trump token, and World Liberty Finance, a crypto enterprise founded by Trump's sons. In addition to its various crypto ventures, WLF functions as a stablecoin issuer.
Blumenthal deemed Trump's crypto business an unprecedented conflict of interest. Here's what he wrote:
"President Trump's financial ties to the $TRUMP coin, as well as the attempts to utilize the White House to boost the value of $TRUMP, represent an unprecedented, pay-to-play scheme granting access to the Presidency to the highest bidder."
Democrats are pressing for legislation preventing elected officials and their families from transacting in crypto assets, including stablecoins, before the term's end, but their efforts have yet to bear fruit. These questions remain significant but seem to take a backseat for Republicans, eager to move crypto legislation forward.
"I have a feeling this is intertwined with other issues," Lummis told reporters.
- The seemingly impartial GENIUS Act, aimed at regulating stablecoins, has encountered significant resistance in the Senate, with the recent vote indicating deep divisions within the Congress.
- Binance, a leading cryptocurrency exchange, found itself under legal scrutiny by the SEC during the Biden era, with charges of dealing with unregistered securities, a status that now seems to be viewed differently by current SEC officials.
- Coinbase, one of the most prominent cryptocurrency platforms, achieved a milestone by listing on NASDAQ during President Biden's term, despite the continued skepticism from the SEC.
- Scott Galloway, a professor at New York University's Stern School of Business, raised concerns over potential corruption in the crypto space, specifically with regards to profits made from DeFi businesses.
- The demise of the GENIUS Act has brought renewed queries about the role of XRP, as some Democratic Senators wondered if there was a conflict of interest with the involvement of Ripple in foreign transactions.
- The issue of cryptocurrencies and policy-and-legislation has not been left unaddressed in the Biden era, with the SEC under Gary Gensler's leadership approving Bitcoin ETFs, despite commissioner Hester Peirce's criticism of the process.
- The political landscape of cryptocurrencies is complex, with some, like Cynthia Lummis, a Republican Senator, questioning the validity of Operation Choke Point 2.0, which allegedly sought to debank clients dealing with digital assets.
- In light of the recent failures in regulating cryptocurrencies, Van Jones, a CNN host, argues that Democrats risk losing potential supporters when they alienate crypto enthusiasts.
- Nonpartisan issues like finance and business are not immune to the influence of war-and-conflicts and politics, as demonstrated by the alleged profiteering from Trump's memecoin and Senator Warren's call for legislation preventing elected officials from transacting in crypto assets.
- Tron, a decentralized blockchain-based operating system founded by Justin Sun, serves as a prime example of the ongoing struggle between innovation and regulation, with its crypto tokens being caught up in the controversy surrounding stablecoins.
- Democrats, despite their cautious approach towards crypto to avoid risks, are pushing for legislation to prohibit elected officials and their families from transacting in crypto assets before the term's end, aiming to address concerns related to conflicts of interest. Meanwhile, Republicans seem more focused on pushing crypto legislation forward.