WASHINGTON – A bipartisan effort to create a legal framework for cryptocurrency was halted in the Senate on May 8, as Democrats blocked the bill amidst growing concerns over former President Donald Trump’s ties to the industry, sparking chaos in the negotiations.
In a tense vote, the Senate sided 48-49, narrowly preventing the legislation from moving forward. Among the opposition, two Republican senators—Rand Paul of Kentucky and Josh Hawley of Missouri—joined all present Democrats in voting against the bill. Hawley explained his vote, emphasizing his desire to see “big tech prohibitions” included, while Paul expressed worry that regulatory measures could stifle the industry’s growth.
The procedural move by Senate Republican Leader John Thune to vote against the measure allows for the possibility of another vote on the bill down the road.
This vote marks the culmination of a week of intense negotiations, which saw a group of nine Senate Democrats reverse their stance on the bill, known as the GENIUS Act, which had initially received their support. On May 3, they declared they could no longer back it due to concerns that the bill fell short in addressing issues like money laundering and safeguarding national security.
With the Senate requiring at least 60 votes to bypass the filibuster and pass the bill, Democrats would need to rally seven of their own members to secure its passage. The bill had enjoyed strong backing from crypto lobbyists, who viewed it as a potential catalyst for expanding the digital currency market.
Senate Democratic Leader Chuck Schumer, responding to the vote, lamented the lack of an updated bill text, pointing out the challenge of voting on legislation without having seen its final details. “How do you vote for a bill if you haven’t seen the text?” Schumer asked reporters.
This legislative shift followed a change in the Trump administration’s stance on cryptocurrency. As part of an effort to bolster the crypto industry in the U.S., the administration had championed a “strategic bitcoin reserve” and an accumulation of digital assets, alongside a de-escalation of the regulatory measures put in place during President Biden’s tenure.
While this shift has been seen as a boon for the cryptocurrency market, it has also brought scrutiny to Trump’s personal connections to the industry. His family’s businesses, it turns out, stand to gain substantially from this crypto-driven policy change.
Since January, two of Trump-affiliated companies have reportedly earned at least $300 million in trading fees from the sale of his meme coin and other digital currencies. One such promotion occurred in late April, when a company tied to Trump used an “intimate private dinner” at his northern Virginia golf club to hype the $TRUMP meme coin. As a result, the coin’s value soared by as much as 80%.
Additionally, on May 1, World Liberty Financial, another Trump family-owned entity, revealed that one of its digital assets was being used by an Abu Dhabi-backed investment firm in a $2 billion cryptocurrency investment in Binance, one of the world’s largest cryptocurrency exchanges. This marked a significant foreign investment benefiting Trump’s family, raising more questions about potential conflicts of interest.
A spokeswoman for the White House has stated that Trump’s financial interests are held in a trust managed by his children, ensuring there is no conflict of interest. However, these developments have fueled increasing scrutiny, with some Congressional Democrats even staging a walkout during recent hearings and investigations into the matter.
The crypto industry’s future in the United States now hangs in the balance, as this legislation faces further hurdles and political maneuvering. For now, the push for regulatory clarity continues, though it remains uncertain whether a compromise can be reached anytime soon.
