Democrats Torn as Trump Ties Spark Crypto Regulation Push \ Newslooks \ Washington DC \ Mary Sidiqi \ Evening Edition \ While Democrats denounce President Trump’s deepening crypto interests as corruption, several support the bipartisan GENIUS Act—designed to regulate stablecoins. But controversy surrounds its omission of presidential conflict-of-interest protections, prompting calls for reform.
Quick Looks
- Trump is expanding a crypto empire with private investor dinners.
- Democrats condemn the White House for “blatant corruption.”
- GENIUS Act moving forward to regulate stablecoins.
- 16 Senate Democrats crossed party lines to support the bill.
- Critics argue it fails to prevent Trump family from crypto gains.
- Political spending by crypto PACs exceeded $130 million in 2024.
- Senate vote advanced the Act 66–32—now heading for final passage.
- Amendment to ban presidential profit has backing but uncertain future.
- Democrats like Schumer, Murphy, and Warren voiced their opposition.
- Industry eyes broader market-structure reforms after the Act passes.
Deep Look
President Donald Trump, now in his second term, has quickly transformed the White House into a central force in the booming world of cryptocurrency. With strategic private dinners hosted at his golf clubs and a range of high-profile investments—including ventures into Bitcoin mining, a stablecoin enterprise, and even a Trump-branded meme coin—Trump’s crypto empire is expanding at full speed. While Democrats blast his actions as blatant self-dealing, the reality of the political landscape is more complicated. Many in the Democratic Party are themselves navigating the evolving crypto terrain with caution—and, in some cases, with tacit support.
This tension has erupted into the open during debate over the GENIUS Act, a major piece of legislation currently moving through the Senate. The bill, which aims to regulate stablecoins—a form of cryptocurrency tied to fiat currencies like the U.S. dollar—is being advanced by a coalition of Republicans and centrist Democrats. While it’s intended to impose necessary consumer protections and establish regulatory clarity for a maturing market, it has also laid bare a troubling exception: the bill bars members of Congress and their families from profiting from stablecoins, but excludes the president and their family from those same restrictions.
That loophole has drawn the ire of many Democrats who see it as tailor-made for President Trump’s benefit. “There’s a gaping hole in this bill that everybody sees,” said Sen. Chris Murphy (D-Conn.). “After it’s passed, it will be illegal for me to issue a cryptocurrency, but it’s legal for the president of the United States.”
Despite these concerns, the bill is advancing rapidly—an unusual pace for such consequential legislation. The reason? Crypto has arrived in Washington not just as a technological force but as a major political player. Crypto-focused PACs, led by the powerful super PAC Fairshake, have flooded the 2024 election cycle with over $130 million in spending, targeting key congressional races and backing both Republicans and Democrats.
Fairshake’s influence was particularly visible in Ohio, where it spent $40 million to help Republican Bernie Moreno defeat Democratic incumbent Sherrod Brown, a crypto skeptic and chair of the Senate Banking Committee. In Michigan, Fairshake backed Democrat Elissa Slotkin with $10 million in her successful Senate run, even though she won by fewer than 20,000 votes. These investments have underscored a stark reality for lawmakers: crypto can make or break political careers.
“DC received a clear message that being anti-crypto is a good way to end your career,” said Coinbase CEO Brian Armstrong following the election. Coinbase, the largest U.S. crypto exchange, has poured millions into political influence and insists its agenda is bipartisan. Its lobbying arm even warned lawmakers that a Senate vote on May 19 would be used to score their crypto-friendliness—adding pressure to a legislative process already full of tension.
In January 2025, Fairshake disclosed that it held $116 million in reserve for the 2026 midterms, signaling that its political influence is only growing. “We’re not slowing down,” said Fairshake spokesperson Josh Vlasto. “Everything remains on the table.”
The push to legitimize stablecoins has created a strange-bedfellows coalition in the Senate, where 16 Democrats joined Republicans in initially supporting the GENIUS Act. Yet, when the Trump exemption became public, many Democrats reversed their positions. Senate Minority Leader Chuck Schumer reportedly urged his caucus to block the bill temporarily, using that leverage to force negotiations with Republicans. Even the White House became involved, conducting private calls with senators from both parties in an attempt to maintain momentum for the bill.
Still, a revised version of the GENIUS Act is expected to pass the Senate this month. An amendment introduced by Sen. Jeff Merkley (D-Ore.) and co-sponsored by Schumer, which would prohibit the president and their family from profiting from stablecoins, has been proposed—but analysts believe it’s unlikely to succeed. Despite the flaws, many lawmakers argue that the legislation is a crucial first step in crypto regulation.
“There is room for improvements as there often is with a lot of legislation,” said Sen. Mark Kelly (D-Ariz.). “But this was negotiated in good faith. We got to a place. I expect this is the version we’re going to pass.”
Still, discontent lingers. Schumer has continued to oppose the bill, though he acknowledges division within the Democratic caucus. Others, like Murphy, insist that any serious legislation must address the White House’s involvement in crypto. “You can’t regulate an industry that the president is openly profiting from,” he said. “That’s not regulation—it’s endorsement.”
Beyond stablecoins, crypto advocates are already looking ahead. If the GENIUS Act passes the Senate and clears the House, attention will shift to broader market structure legislation. These future bills would govern how digital assets are bought, sold, and traded across platforms, a much more complex regulatory challenge. Coinbase policy head Kara Calvert said the goal is to push Congress to take the next leap: “Stablecoin is one step of the path. Then you need market structure.”
The Democratic Party faces a delicate balancing act. While wary of Trump’s deepening crypto entanglements, they are also aware that the industry has growing support among younger voters and male voters, two demographics they lost ground with in the 2024 election. Ignoring or opposing crypto entirely could mean further political erosion.
In the end, the GENIUS Act has become more than just a bill—it’s a symbol of the new power dynamics in Washington. The intersection of presidential influence, financial technology, and campaign finance has transformed crypto from a fringe issue into a defining political battleground of the Trump era.
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