How Trump’s ‘crypto’ moves derail pro-crypto legislation

There may be trouble on the horizon for the cryptocurrency industry in the United States, now that some of the pro-crypto legislation moving through Congress is suddenly under scrutiny, as both Republicans and Democrats begin asking tough questions about conflicts of interest, ethical concerns, and even the possibility of bribery or insider trading concerning the relationship between proposed crypto-bills and the president of the United States.

Bills such as the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, which initially had bipartisan momentum, looked primed to pass through the Senate without conflict. However, things began to unravel when lawmakers took a closer look at how the bill aligned with recent developments involving President Donald Trump and his family’s deepening involvement in the crypto world.

Trump’s ‘crypto’ ventures trigger ethics concerns

The real issue that halted the GENIUS Act’s progress wasn’t necessarily the bill’s content. The real trouble began when lawmakers on both sides of the aisle started expressing concern that the legislation wasn’t being advanced strictly on the merits, but rather to benefit those in power, specifically, the president and his family’s personal crypto ventures.

Heading into the 2024 election, Trump positioned himself as the “pro-crypto” candidate. On the campaign trail, he repeatedly emphasized that he wanted to make the United States the global hub for cryptocurrency innovation. And once he defeated Joe Biden and was sworn in as the 47th president, he began to act on those promises.

Trump signed an executive order promoting cryptocurrency and stablecoin development, and subsequently, key federal agencies, including the Securities and Exchange Commission (SEC), started signaling a friendlier stance toward crypto companies. All of this was seen as a win for the cryptocurrency industry. Around this same time, Trump was venturing deeper into the crypto world.

The Trump family launched or acquired ownership stakes in multiple crypto-related businesses. Donald Trump and Melania Trump both launched memecoins. Their company, World Liberty Financial, in which the family reportedly owns a 60% stake, announced plans to launch a stablecoin. Trump’s sons, Donald Jr. and Eric, acquired a majority stake in a BTC mining company called American Bitcoin, which they plan to take public by the end of 2025.

Crypto enthusiasts loved each of these moves and saw the president and his family as one of their own, but from a policymaking perspective, the administration wasn’t just making policy; they were participating in the market that those policies would impact. When you are sitting on your couch watching this play out, it does not sound like a big deal, but it was enough to make lawmakers pause, and that pause was all it took to halt the GENIUS Act. The bill failed to advance in a Senate vote with a final count of 49 “no” votes to 48 “yes” votes.

It’s important to note that there’s nothing illegal about a sitting or former president investing in crypto, launching a blockchain business, or even profiting from legislation boosting the industry. When framed as innovation policy, these moves can appear pro-growth for the industry and the country.

But when political power intersects with personal profit, it crosses a different territory. What we’re seeing here is what many would describe as “soft corruption,” where what takes place isn’t illegal, but it undermines public trust. Unlike those merely watching this play out, lawmakers are bound not only by laws, but also by ethics rules and codes of conduct. Failing to uphold these standards—even if the enforcement of these guidelines is often nonexistent—can lead to investigations, media blowback, and long-term reputational damage.

Trump family’s ‘crypto’ ties face backlash

Another point of concern is Trump’s personal memecoin, $TRUMP. Recently, the $TRUMP team launched a promotion promising that the top 220 holders of $TRUMP would receive an invitation to a private dinner with the president.

Lawmakers are worried that this setup effectively allows domestic or foreign individuals to buy their way into a private room with the president. Considering how little is known about many wallet holders beyond their on-chain activity, lawmakers are highlighting national security concerns with this model.

Even though no laws have technically been broken, the damage this will have on future crypto legislation may already be done. If every new bill related to digital assets becomes a chess match over whether it unfairly benefits the president or his inner circle, the process will slow to a crawl.

Each bill will face longer debates, more intense media scrutiny, and drawn-out committee negotiations as lawmakers try to scrub out any ethical issues that may be in play. This doesn’t mean crypto policy won’t progress; it just means it will move more slowly.

Will ‘crypto’ policy move forward?

The bigger issue is that public trust may already be eroding. Once both parties begin publicly questioning whether the president is too involved in crypto, it becomes harder to sell the public, or even other lawmakers, on the idea that any legislation can be passed without bias.

And because there’s no going back since the president is already deeply tied to crypto through his family’s business ventures, these concerns aren’t going to disappear. Unless Trump separates himself from these projects, future crypto bills may face the same scrutiny, delay, and opposition that the GENIUS Act encountered.

But, even with all this newfound drama around pro-crypto legislation, proposed bills will continue progressing. In a recent procedural vote known as a cloture vote, the Senate voted 66–32 in favor of advancing the GENIUS Act, which had previously been stalled.

A cloture vote just means lawmakers have agreed to end the debate and move toward a final vote, a clear sign that the bill isn’t dead, despite facing obstacles. The question now becomes: what changes will the GENIUS Act undergo to address these concerns and make lawmakers on both sides of the aisle feel comfortable voting it through?

Regardless, the new reality of the situation won’t be going away. We now have a crypto-friendly administration pushing to move U.S. crypto innovation forward, and a Congress that’s becoming increasingly skeptical of how that future intersects with the president, the people close to him, and their power, money, and influence.

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