Trump Defies Critics, Expands Crypto Holdings Amid Legal Scrutiny
Trump’s crypto conflicts continue to grow as his family’s cryptocurrency firm, World Liberty Financial, closes a $2 billion business deal with an Abu Dhabi-backed fund. The Trump family owns 60% of the company and stands to make hundreds of millions from this deal.
The former president keeps pushing deeper into cryptocurrency ventures despite ethical red flags. His company World Liberty Financial has sold $550 million of a new crypto coin called $WLFI. The money flows directly to Trump’s business entities. The company’s stablecoin USD1 now handles transactions between Emirati investment firm MGX and Binance, the world’s largest cryptocurrency exchange. Trump’s meme coin value has shot up after he offered a private dinner to top holders. This move raised new questions about selling access. The GENIUS Act, which would have created federal rules for stablecoins, failed because Trump’s personal cryptocurrency ventures created too many conflicts of interest.
Congress Rejects GENIUS Act Over Trump’s Crypto Ties
The House Financial Services Committee dropped the GENIUS Act (Generating Liquidity, Innovation, and Stability in the United States) this week after heated debates about the former president’s growing cryptocurrency ventures. This unexpected rejection shows lawmakers’ deep concerns about government officials getting tangled up with digital assets.
Senate Democrats cite ethical concerns and foreign influence
Democratic leaders pointed to Trump’s substantial cryptocurrency holdings that created clear conflicts with the bill. Senator Elizabeth Warren led the charge against the legislation. She stressed how Trump’s family’s 60% ownership in World Liberty Financial created “a situation where regulations could directly benefit the president’s own finances.”
“We can’t move forward with laws that could make a sitting official richer while foreign entities gain power through crypto channels,” Warren said during floor debates. Other Democrats shared her worries about the timing of the $2 billion MGX investment through Trump-connected cryptocurrency systems.
The Banking Committee’s Chair, Senator Sherrod Brown, warned that passing the bill would let foreign money flow through hidden digital channels linked to the president’s family businesses. His committee’s report raised red flags about national security risks as foreign investors increasingly used Trump-affiliated stablecoins.
Bill aimed to regulate stablecoins and boost crypto market cap
The rejected GENIUS Act was the most complete cryptocurrency regulatory framework so far. The law wanted to:
- Set up federal oversight for stablecoin issuers
- Create licensing rules for cryptocurrency exchanges
- Add clear regulations that industry supporters said would boost market value by 30%
“This bill would have brought needed certainty to digital assets,” said Republican Representative Patrick McHenry, the bill’s champion. The bipartisan backing fell apart after news broke about the $WLFI coin’s $550 million sale and its ties to Trump-affiliated businesses.
Cryptocurrency companies pushed hard for the legislation. Major exchanges and industry groups invested heavily to get clear regulations. The bill’s failure sets the industry back, but analysts believe new regulatory approaches will emerge as lawmakers deal with digital asset oversight amid conflicts between public office and private cryptocurrency interests.
Trump Defies Critics by Expanding Crypto Empire
Image Source: The Economic Times
“”Yesterday, I signed an executive order officially creating our strategic Bitcoin reserve. And this will be a virtual Fort Knox for digital gold to be housed within the United States Treasury. That’s a big thing.”” — Donald J. Trump, President of the United States
President Trump has built a massive cryptocurrency empire since taking office. His digital asset holdings now directly connect to his family business. Critics say this creates unprecedented conflicts of interest for a sitting president.
Launch of $TRUMP and $MELANIA meme coins
Trump launched the $TRUMP meme coin right before his inauguration. The coin’s value shot up to AED 275.40 but dropped by a lot. His wife Melania followed with her own cryptocurrency, and $MELANIA quickly reached AED 47.74 billion in market value. These risky investments paid off well for the Trump family. Their company CIC Digital LLC controls 80% of $TRUMP tokens with another company called Fight Fight Fight LLC. State Democracy Defenders Action reports that cryptocurrencies now make up about 40% of Trump’s wealth—roughly AED 10.65 billion.
Private dinner for top coin holders sparks pay-for-access claims
Trump called it “the most EXCLUSIVE INVITATION in the world” last April. He offered a private dinner at Trump National Golf Club to his meme coin’s top 220 holders. Investors rushed to buy more coins worth AED 543.45 million to get a spot. The top 25 holders would also get an “ultra-exclusive private VIP reception” and special tour. Politicians from both parties criticized this move. Republican Senator Lisa Murkowski said, “I don’t think it would be appropriate for me to charge people to come into the Capitol and take a tour”. Democratic Senators Elizabeth Warren and Adam Schiff asked for an ethics investigation. They called the dinner a potential “pay-to-play” scheme.
Trump family earns from market-making via CIC Digital and Fight Fight Fight LLC
Trump’s companies make substantial money from trading fees every time someone buys or sells the token. Financial Times found these operations have brought in at least AED 1.29 billion. The dinner announcement alone earned these entities about AED 4.96 million in extra fees. The results show a stark contrast: while 60 large wallets have made nearly AED 5.51 billion, about 600,000 smaller investors have lost AED 14.21 billion combined.
Foreign Deals and Stablecoin Usage Deepen Legal Scrutiny
“”The federal government is already among the largest holders of Bitcoin, as you know. Really, one of the largest holders in the world with as many as 200,000 Bitcoin obtained via civil law and various other forms of law and including enforcement actions. These existing holdings will form the foundation of the new reserve.”” — Donald J. Trump, President of the United States
The scrutiny of Trump administration’s crypto ties has grown stronger as foreign money flows through Trump-backed digital currencies. New developments show how the president’s business deals now directly profit from foreign government transactions, which raises unprecedented ethical questions.
MGX’s $2B investment via USD1 stablecoin
Abu Dhabi-based MGX has chosen World Liberty Financial’s USD1 stablecoin to complete a AED 7.34 billion ($2 billion) investment in Binance, the world’s biggest cryptocurrency exchange. This deal stands as the most important milestone for Trump’s crypto venture, according to Zach Witkoff, co-founder of World Liberty Financial, who spoke at a Dubai crypto conference. The investment ranks among the biggest funding deals in crypto and marks Binance’s first major institutional investment.
“We are excited to announce today that USD1 has been selected as the official stablecoin to close MGX’s AED 7.34 billion investment in Binance,” said Witkoff, whose father works as Trump’s special envoy to the Middle East. The deal has pushed USD1’s market value from about AED 477.35 million to over AED 7.34 billion in a matter of days.
Revenue from Treasury bond yields benefits Trump family
The Trump family’s profits look substantial. World Liberty Financial, as USD1’s issuer, makes money by investing stablecoin purchase dollars into US Treasury bonds. The numbers are impressive – if World Liberty puts the entire AED 7.34 billion into short-term US Treasuries at 4 percent yield, they could earn around AED 312.11 million ($85 million) yearly in interest.
The Trump family controls 60% of World Liberty Financial through another company. The business model works simply – stablecoin issuers like World Liberty take deposits from investors and give them stablecoins. They then invest these deposits to earn yields they keep as revenue.
Opaque ownership raises national security alarms
Nobody knows who holds most USD1 tokens, which raises serious security concerns. Crypto research firm Arkham found that an anonymous cryptocurrency wallet holding AED 7.34 billion in USD1 received the funds between April 16 and 29. This lack of transparency has lawmakers worried.
Senator Elizabeth Warren criticized the deal harshly. She pointed out that a fund “backed by a foreign government just announced it will make a AED 7.34 billion deal using Donald Trump’s stablecoins”. Democrats want the Office of Government Ethics to investigate, warning about a “quid pro quo that could endanger national security”.
Robert Weissman from Public Citizen says this creates unprecedented conflicts where “foreign governments, as well as people and corporations under investigation, so overtly and directly funnel so big sums to the president of the United States and his family”.
Crypto Industry Faces Setback as Bipartisan Support Erodes
Crypto industry took a major hit when Senate Democrats blocked the GENIUS Act. This move showed how the digital asset sector lost its once-strong support from both parties. The bill couldn’t get the needed 60 votes and failed with a 49-48 vote.
Democrats withdraw support for stablecoin bill
Support for the legislation crumbled as nine Democratic senators changed their minds. Four senators who backed it in committee backed out: Ruben Gallego, Mark Warner, Lisa Blunt Rochester, and Andy Kim. Senator Elizabeth Warren led the charge against it, saying “the Senate should not pass a bill that facilitates Trump’s breathtaking corruption and lines his pockets”. Behind the scenes, Minority Leader Chuck Schumer pushed Democrats to hold back their support to push for more changes.
Crypto lobby’s alignment with Trump backfires
The crypto industry poured money into political influence. Leading super PACs spent AED 481.02 million on congressional races. This seemed to work at first, with 274 pro-crypto candidates winning House seats and 20 making it to the Senate. In spite of that, the industry’s ties to Trump made its legislative goals harder. Senator Jeff Merkley pointed out a basic problem: “Currently, people who wish to develop influence with the president can enrich him personally by buying cryptocurrency he owns or controls”.
Public trust in digital asset regulation declines
People remain skeptical about cryptocurrency. A 2023 Pew study found three-quarters of people don’t trust current crypto trading methods to be reliable or safe. Republican Senate Majority Leader John Thune suggested Democrats just wanted to stop Trump from getting a bipartisan win. Crypto supporters worried about how the president’s business ventures hurt policy progress. “It’s unfortunate that personal business is getting in the way of good policy,” said Ryan Gilbert, founder of Launchpad Capital.
Trump’s unusual conflicts turned cryptocurrency from a potential area where both parties could work together into a politically charged issue.
Crypto Conflicts Change Political Map
Trump’s cryptocurrency ventures have changed how presidential power mixes with personal financial interests. The GENIUS Act failed because of these new entanglements. Democrats who once supported bipartisan cryptocurrency regulation ended up pulling their support. They pointed to serious ethical issues with the former president’s growing digital asset empire.
The $2 billion MGX investment using Trump-backed stablecoins has sparked concerns about foreign influence. This single deal could make the Trump family hundreds of millions through their 60% stake in World Liberty Financial. They also profit from meme coin markets through fees and tokens, which make up about 40% of Trump’s estimated worth.
A controversial private dinner that only top token holders could attend created what many saw as a direct pay-for-access system. Senator Murkowski and other Republicans questioned if these arrangements were appropriate. They didn’t back Democratic demands for ethics investigations.
The cryptocurrency industry spent heavily on political influence but now faces problems. Their legislative goals have become mixed up with Trump’s business interests. Public trust in digital asset regulation has dropped, and three-quarters of Americans doubt cryptocurrency’s safety. What could have been a chance for both parties to work together has turned into another political battleground. This shows how personal business interests can derail broader policy goals.
