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Some Democrats pulled their support for a crypto-friendly Senate bill this week amid conflict-of-interest concerns surrounding the Trump family’s World Liberty Financial crypto firm—as Trump’s involvement in crypto complicates bipartisan efforts to establish industry-friendly regulations.
The Trump Organization executive vice-president Eric Trump (R) and World Liberty Financial ... More co-founder Zach Witkoff participate in a session during the Token 2049 crypto conference in Dubai on May 1, 2025. (Photo by GIUSEPPE CACACE/AFP via Getty Images)
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The crypto industry advocated for the GENIUS (Guiding and Establishing National Innovation for US Stablecoins) Act to establish a regulatory framework for stablecoins, which are often tethered to the U.S. dollar and are less volatile than other forms of cryptocurrency, to help legitimize stablecoins for issuers and custodians.
The bill appeared poised for passage until some Democrats pulled their support in recent days after MGX, which is backed by the government of Abu Dhabi, announced it would invest $2 billion in Binance using the USD1 stablecoin developed by World Liberty Financial—the latest World Liberty Financial endeavor to raise concerns its investors could seek a quid pro quo with the Trump administration.
Sixty percent of World Liberty is owned by the Trump family, and Eric Trump and Donald Trump Jr., play a key role in managing the business.
Nine Senate Democrats, including four who supported it in a banking committee vote, said in a statement Saturday they wouldn’t back the GENIUS Act in its current form, imperiling its passage as it needs the support of seven Democrats, along with all Republicans, to break the filibuster.
The group called for “stronger provisions on anti-money laundering, foreign issuers, national security” and “preserving the safety and soundness of of our financial system, and accountability for those who don’t meet the act’s requirements,” adding they are “eager to continue working with our colleagues to address these issues.”
Senate Minority Leader Chuck Schumer, D-N.Y., also reportedly urged Democrats to withhold support of the bill in a meeting Thursday, where some Senate Democrats expressed concerns about the World Liberty Financial deal with MGX.
Chief Critics
Sen. Jeff Merkley, D-Ore., was among the Democratic senators who reportedly spoke out during the Thursday meeting and told The New York Times the World Liberty-MGX deal is “a selling of influence” and “a massive form of corruption we haven’t witnessed.” Sen. Elizabeth Warren, D-Mass., told the paper “no senator” should support the Senate bill, because it “will make it easier for the president and his family to line their own pockets.”
Merkley and Warren asked the U.S. Office of Government Ethics on Monday to open a probe into the MGX-World Liberty deal, arguing that if it’s completed it “would represent a staggering conflict of interest, one that may violate the Constitution and open our government to a startling degree of foreign influence and the potential for a quid pro quo that could endanger national security.” The senators noted the chairman of MGX is Sheik Thanoun Bin Zayed Al Nahyan, the National Security Advisor of the United Arab Emirates.
Key Background
The MGX-World Liberty Deal was unveiled last week at the Token2049 convention in Dubai by Trump’s son, Eric Trump, and Zach Witkoff, a founder of World Liberty Financial and the son of Trump’s Middle East envoy, Steve Witkoff. Trump began promoting World Liberty Financial in August, when the purpose of the venture was a bit murky, though it’s since solidified itself as a crypto dealer with activities that have repeatedly raised conflict-of-interest alarms, including Trump policy announcements that have briefly boosted the value of its stock. It has multiple foreign investors, The New York Times reported recently, noting that they would be prohibited from donating to Trump’s campaign under federal law. A spokesperson for World Liberty, David Wachsman, said “it would be false, absurd and dangerous to suggest that investments or partnerships with World Liberty Financial were conducted as some sort of political quid pro quo,” adding that “never has an investor or partner requested any political favoritism. Nor would we ever entertain such a possibility.”
Further Reading
Trump Crypto Deals Provoke Senate Backlash and Calls for Investigation (New York Times)
Secret Deals, Foreign Investments, Presidential Policy Changes: The Rise of Trump’s Crypto Firm (New York Times)
Trump Sons’ Deals on Three Continents Directly Benefit the President (New York Times)
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