Senator Elizabeth Warren is leading the charge against the GENIUS Act, a bill aimed at regulating stablecoins. She claims the bill is riddled with loopholes that could lead to widespread corruption, specifically citing a deal involving a Trump-linked company.
A Shady Crypto Deal?
Warren points to a deal between World Liberty Financial (WLFI), a company connected to President Donald Trump, and MGX, a UAE-based firm. This deal, involving WLFI’s USD1 stablecoin and a massive $2 billion investment linked to Binance, allegedly boosted USD1’s market value dramatically, making it a top-7 stablecoin. Warren calls this a “shady crypto deal” that could make the Trump family incredibly wealthy, thanks to a foreign government. She’s urging the Senate to reject the bill to prevent this kind of corruption.
Support for the GENIUS Act Crumbles
The GENIUS Act’s support is rapidly dwindling. At least ten senators, including Senator Ruben Gallego, have withdrawn their support, citing concerns about weak anti-money laundering measures, national security risks, and the potential for foreign manipulation of the US financial system through the bill’s loopholes. They argue the bill lacks sufficient penalties for rule-breaking stablecoin issuers.
WLFI Delays Exchange Listing
Adding to the turmoil, WLFI has postponed listing USD1 on major cryptocurrency exchanges. They’re waiting for regulatory clarity, but this delay could severely hurt USD1’s chances in the competitive stablecoin market. The uncertainty is creating major problems for the Trump-backed cryptocurrency venture, which was counting on the GENIUS Act to provide a framework for growth.
The Future of the GENIUS Act is Uncertain
The GENIUS Act was expected to get a House vote in May. However, with the Senate’s growing opposition, the future of the bill is highly uncertain. While some lawmakers initially supported the bill as a way to regulate the stablecoin market, the controversy surrounding WLFI and the USD1 surge has created a major political obstacle. The Trump administration likely didn’t expect this level of pushback, and the Senate’s skepticism could kill the bill entirely.
