Senate Democrats are demanding changes to cryptocurrency legislation pending in Congress, responding partly to growing evidence that the Trump family is using its connections and President Trump’s power to profit from crypto trading.
The pushback intensified late last week after a closed-door meeting among Senate Democrats in which Senator Chuck Schumer, the Democratic leader, told colleagues they should not commit to voting for the so-called GENIUS Act, a bill backed by the crypto industry.
For months, the bill had appeared to be gliding toward passage, with support from both parties, and it was scheduled for a procedural vote this week. But in the meeting, Senate Democrats expressed concern that the legislation would directly benefit the Trump family’s crypto business, citing reporting by The New York Times.
Among the concerns the senators raised, according to lawmakers, is that the Trump-affiliated crypto firm, World Liberty Financial, recently secured a deal to take $2 billion in deposits from an Emirati venture fund backed by the government of Abu Dhabi, as The Times reported last week.
“It’s a selling of influence, a conflict of interest, just a massive form of corruption we haven’t witnessed,” Senator Jeff Merkley, Democrat of Oregon, said in an interview, echoing comments he said he made at the meeting. “And it needs to be ended.”
And Senator Elizabeth Warren, Democrat of Massachusetts, pushed other Democrats to take a stand on the matter.
The Senate legislation “will make it easier for the president and his family to line their own pockets,” Ms. Warren said in a statement. “This is corruption and no senator should support it.”
Those ethical concerns have contributed to a broader unease about the bill among Democrats. Several senators have also pointed to other issues, arguing that the legislation lacks sufficient protections against money laundering.
Representatives for the White House, the Trump Organization and World Liberty did not immediately respond to requests for comment.
Crypto executives have lobbied for months to pass the GENIUS Act, a bill that would make it easier for U.S. companies to deal in stablecoins, a type of cryptocurrency that maintains a price of $1. It would be one of the first formal acts by lawmakers to create a regulatory system that could help the industry grow in the United States. Crypto traders like to use stablecoins because they do not swing in value the way other digital currencies do, making them convenient for many types of business transactions.
But a boost to the industry would also be a boost to World Liberty, expanding the market for a stablecoin that it recently began issuing. The Trump family and its partners are already positioned to take in tens of millions of dollars a year in revenue, if not more, on those stablecoins issued by World Liberty.
That prospect has prompted pushback from Democratic lawmakers.
At the meeting on Thursday, Democrats raised a series of objections to the bill, pointing to Mr. Trump’s conflicts of interest, as well as language that would help overseas stablecoin firms evade some of the new rules.
On Saturday, a group of nine Democrats, including four who voted to advance the legislation out of the Senate Banking Committee, announced that they would not support it without major changes. They argued that the bill lacked strong provisions to stop money laundering and police foreign crypto firms but did not mention Mr. Trump’s crypto business.
Senate Republicans need at least seven Democrats to vote with them to move the legislation past procedural hurdles, so the opposition that has emerged could kill the legislation, potentially a major blow to the crypto industry’s policy objectives in Washington.
During the 2024 election cycle, crypto firms spent more than $130 million backing congressional candidates, including Democrats in tight races, like Senator Elissa Slotkin of Michigan and Senator Ruben Gallego of Arizona. Mr. Gallego, who voted to advance the GENIUS Act out of the Banking Committee, was one of the lawmakers who signed the statement this weekend expressing concerns about the bill.
Mr. Merkley and Ms. Warren separately moved on Monday to ask the Office of Government Ethics to investigate the Trump family’s growing cryptocurrency business deals, calling them “a startling degree of foreign influence and the potential for a quid pro quo that could endanger national security.”
A version of the stablecoin bill is also pending in the House, where Democratic leaders plan to protest Mr. Trump’s role in the industry on Tuesday by walking out of a hearing on the industry.
Representative Sam Liccardo, Democrat of California, who supports stablecoin legislation, said the recent moves by the Trump family have frustrated crypto executives who have been pushing Congress to finalize the bill.
“I’ve increasingly been hearing concern in Silicon Valley from crypto industry leaders — deep discomfort with how Trump has wrapped this industry into a kleptocratic scheme managed by his sons,” Mr. Liccardo said.
Even some Senate Republicans and longtime crypto advocates, have expressed concerns about the efforts by Mr. Trump and his family to profit from crypto. “This is my president that we’re talking about, but I am willing to say that this gives me pause,” Senator Cynthia Lummis, Republican of Wyoming, told NBC News last week.
A onetime crypto skeptic, Mr. Trump embraced digital currencies on the campaign trail last year, promising to turn the United States into the “crypto capital of the planet.” In September, he and his sons announced they were starting World Liberty, a business that would offer its own digital currencies.
Once in office, Mr. Trump appointed leaders at major federal agencies who support the industry and quickly ended a Biden administration crackdown. But the crypto world’s primary aim in Washington was to secure ambitious legislation that would cement the industry’s standing in the U.S. financial system.
The GENIUS Act was the first bill to pick up momentum. In March, the Banking Committee voted 18 to 6 to advance the legislation, with Mr. Gallego and four other Democrats supporting it.
Soon it became clear that the stablecoin rules would directly intersect with Mr. Trump’s business. About two weeks after the committee vote, World Liberty announced it would offer its own stablecoin, called USD1, which could be extraordinarily profitable for the Trump family.
Companies that issue stablecoins operate similarly to banks: The issuers make money by accepting deposits from buyers, giving them coins in return and then investing those deposits to generate a yield that the companies keep.
Last week, one of World Liberty’s founders announced at a crypto conference that a venture capital firm backed by the government of Abu Dhabi would use $2 billion worth of USD1 to conduct a major industry transaction — effectively funneling money into a business led by the U.S. president’s family.
Recent reporting from The Times about the Abu Dhabi transaction and other conflicts of interest trailing World Liberty circulated widely in the Capitol last week. Senate Democrats distributed research memos citing those investigations and attacking the legislation as a vehicle for the Trump family to “corruptly profit from his cryptocurrency schemes,” according to copies obtained by The Times. Representative Maxine Waters, Democrat of California, read aloud one of The Times’ articles in its entirety during a committee hearing last week.
At the meeting of Senate Democrats, Mr. Schumer said he was worried about language in the legislation that could allow Tether, a foreign company that was targeted by U.S. regulators in the past, to offer stablecoins in the United States without following many of the bill’s requirements, according to congressional aides. He urged Democrats to examine classified briefings the Banking Committee had put together about Tether.
A spokeswoman for Tether did not respond to a request for comment. Some details of the meeting were reported earlier by Axios.
Senate aides said on Monday that negotiations are continuing to try to address some of the concerns that Democrats have raised, as lawmakers from both parties, including Senator Kirsten Gillibrand, Democrat of New York, a co-sponsor of the bill, look for a way to move the legislation toward passage.
Mr. Trump has shown no signs that he is deterred. On Monday, he posted an illustration of himself with his fist in the air on his social media platform, Truth Social, urging his supporters to buy a cryptocurrency called $Trump, another new business that has generated more than $100 million in fees for his family and its partners.
On Monday night, a super PAC supporting Mr. Trump was scheduled to hold a fund-raiser at his Trump National Golf Club in Virginia, sponsored by crypto executives, who were asked to pay $1.5 million apiece to attend.
