03-17-2025 
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The U.S. Senate is making progress in approving legislation governing stablecoins, opening the door a little wider for Tether in the process.
- Senate stablecoin bill throws Tether a lifeline
- Tether’s Ardoino plays U.S. tourist, dollar savior
- Trump’s World Liberty Financial sells $550m worth of tokens
- BTC nudges upward on faint hope of federal gov’t purchases
- Democrats want to ban strategic BTC reserve
- Americans don’t want to pay for it
- David Sacks given conflict of interest waiver he says he didn’t need
On March 13, the Senate Banking Committee made history by approving the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act introduced last month by Sen. Bill Hagerty (R-TN). The 18-6 vote included support from five Democrat committee members, offering hope for bipartisan consensus when the bill comes up for a vote by the full Senate, something Hagerty hopes will occur by the end of April.
This marks the first time any federal government committee has approved stablecoin legislation. The House of Representatives went one better last summer by approving the FIT21 digital asset market structure legislation in a floor vote, but November’s election prevented further progress in the Senate.
GENIUS underwent major modifications ahead of the committee vote, going from 57 to 89 pages in the process. Among the more substantive changes are requirements for stablecoin issuers to maintain adequate anti-money laundering (AML), sanctions compliance and customer identification programs; retain “appropriate” records of stablecoin transactions; and monitor and report suspicious activity.
Issuers must also implement policies/procedures to “block, freeze, and reject specific or impermissible transactions that violate Federal or State laws, rules, or regulations.”
The modified GENIUS also offers specifics on “foreign” stablecoins, which cannot be “publicly offered, sold, or otherwise made available for trading” in the U.S. That is unless the issuers demonstrate the capacity to “seize, freeze, burn, or prevent the transfer” of their tokens should a court determine there’s a legal reason for doing so.
This appears to be an attempt to ensure the U.S. market remains accessible by USDT, the market-leading stablecoin issued by foreign entity Tether. Under the original GENIUS draft, issuing a foreign-based stablecoin like USDT in the U.S. would have been prohibited.
In what now seems like preparation for this moment, Tether embarked on a belated compliance regime in December 2023 that included freezing USDT when asked by law enforcement—particularly U.S. law enforcement—after previously describing such requests as “disruptive and reckless.”
Earlier this month, Tether froze $23 million in “illicit funds linked to transactions on the Russian-sanctioned exchange, Garantex.” That news came after the U.S. Department of Justice (DoJ) filed criminal charges against two Garantex administrators for facilitating money laundering by criminals and terrorists, as well as violating U.S. economic sanctions.
And yet, Bloomberg reported a year ago that U.S. and U.K. authorities were probing an estimated $20 billion worth of USDT that passed through Garantex, making the recent seizures a drop in the bucket. Both nations sanctioned Garantex in February 2022 after Russia invaded Ukraine.
There are still a few technical hurdles in GENIUS that Tether has yet to clear, including reconstituting its reserve assets. Tether’s reserves currently include BTC, billions’ worth of ‘third-party loans’ and other assets that either (a) can’t be quickly converted to cash, or (b) have volatile fiat values.
Paolo says U.S. needs Tether more than Tether needs US
While GENIUS is a long way from becoming law—it has to pass the Senate floor vote and then travel to the House of Representatives, where multiple stablecoin bills are already in play—Tether’s ties to Commerce secretary Howard Lutnick, founder of Wall Street firm Cantor Fitzgerald (NASDAQ: ZCFITX), seem to have paid off handsomely.
Not only does Cantor hold a ‘convertible bond’ of unspecified size with Tether, but the Wall Street Journal reported that Tether founder Giancarlo Devasini believes Lutnick will use (or has already used) his close ties to U.S. President Donald Trump to ensure Tether doesn’t suffer from any Congress-related fallout. When queried re this claim, Lutnick insisted that he wouldn’t do “anything improper with respect to Tether.”
Last week, Tether CEO Paolo Ardoino set foot on U.S. shores to attend two digital asset-focused conferences, including one thrown by Cantor. It was Ardoino’s first trip to the U.S., a trip he likely wouldn’t have dared make before Trump was elected last November.
On the day GENIUS was being marked up, Ardoino sat for a Fox Business interview in which he stressed that he was “very supportive of what President Trump and [White House A.I. & Crypto Czar] David Sacks are doing” in terms of digital assets.
Ardoino hard-sold the mantra that Tether’s primary role was to preserve U.S. dollar hegemony around the world. Ardoino said it was crucial that all the selfless good work that Tether has been doing on this front is “maintained and helped” by new U.S. legislation.
Ardoino dismissed concerns that U.S. legislation would allow mainstream banks to enter the stablecoin market and offer a less reputationally sketchy option for stablecoin users. Ardoino said tradfi institutions only knew how to build “top-down” solutions, while Tether’s focus was on “growing our user base from the ground up” in emerging markets.
Speaking to Bloomberg the same day, Ardoino was asked whether he was meeting with legislators on Capitol Hill regarding stablecoin legislation. Ardoino said he was indeed “having meetings with lawmakers and the administration. It’s very important that our voice is properly heard.”
Ardoino claimed Tether was “the last stronghold” for supporting dollar hegemony in emerging markets due to “a very big push for de-dollarization coming from the BRICS nations.”
Asked about Tether’s relationship with Lutnick and whether Tether would play a role in Cantor’s proposed BTC lending business, Ardoino said the BTC lending game was “very interesting to us” and “joining forces between Tether and Cantor is the right thing to do.”
Ardoino was a little more maudlin at the Cantor Fitzgerald Global Technology Conference, where he claimed Tether “has been through hell” in the past few years as U.S. authorities probed its operations. Ardoino seemed a little overwhelmed by the fact that he was standing on U.S. soil, saying he’d been warned “that if I came to the U.S. I’d be arrested,” but cheekily added, “We’re still here, right?”
Speaking of getting away with it…
Trump’s decentralized finance (DeFi) project World Liberty Financial (WLF) issued a tweet on March 14 addressing last week’s Wall Street Journal and Bloomberg articles. Those articles claimed that (a) the Trump family was negotiating to take a stake in the Binance digital asset exchange’s U.S. offshoot Binance.US, and (b) Binance founder Changpeng ‘CZ’ Zhao was lobbying the president’s team for a pardon of his felony conviction for violating American banking laws.
CZ claimed the reports “got the facts wrong” but appeared to be choosing his words carefully. WLF’s tweet called the articles “unsubstantiated” and “politically motivated” but similarly avoided addressing the substance of the claims, including that the Binance.US stake acquisition might be made via WLF.
WLF recently celebrated the completion of the second round of sales of its ‘governance’ token (WLFI). With 25% of the total 100 billion WLFI now sold, WLF has raised about $550 million via public sales. A Trump-owned corporation was guaranteed 75% of WLF revenue once WLFI sales topped $30 million.
Initial WLFI sales were sluggish, tapping out around $21 million—well short of the original $300 million target—until Tron founder Justin Sun roared in with a $30 million buy. Sun later upped that to $75 million and WLF made Sun an advisor to the project, despite his ‘colorful’ history and lingering legal issues.
The WSJ report on Binance/Trump claimed the company saw Sun’s blatant influence-buying as a ‘potential legal playbook’ for reviving the fortunes of its moribund American exchange. Binance reportedly even considered making a similar ‘investment’ in WLFI, despite it being a token that cannot be traded or even moved off the carbon-frozen WLF platform and is good only for ‘governance’ votes on a project that has yet to do anything DeFi-related.
Could it really be that easy to bribe an American president? Possibly, and you might not even need crypto to do it. Earlier this month, Wired reported that Trump’s super PAC ‘Maga Inc’ was charging business leaders $5 million to meet one-on-one with the president at Mar-a-Lago, while $1 million got you a seat at a multi-person dinner.Last week, Politico reported on the frenzy of lobbying going on in Washington by non-violent white-collar criminals who believe the bar for accessing the president’s ‘power of the pardon’ is a lot lower than it used to be. That belief gained momentum following Trump’s post-inauguration pardon of Silk Road founder Ross Ulbricht in January.
Among the crypto bros clamoring for Trump’s pardon attention are Roger ‘Bitcoin Jesus’ Ver, FTX founder Sam Bankman-Fried, and BTC block reward miner Jobadiah Weeks, who was convicted in 2020 for duping investors via the BitClub Network fraud.
For what it’s worth, the Polymarket prediction site’s betting market on who Trump will pardon within his first 100 days in office (so by April 29) has CZ at 5%, tied with Ver but ahead of SBF (3%). Jobadiah Weeks didn’t make the cut. Bummer.
Strategic reserve bills all the rage, but will it include buying?
The fiat value of BTC and other prominent tokens went into freefall following Trump’s first crypto summit at the White House earlier this month. Speculators had hoped Trump would finally announce plans to use taxpayer funds to buy additional BTC for his ‘Strategic Bitcoin Reserve,’ rather than simply preventing the sale of the nearly 200,000 BTC tokens already in government hands.
BTC staged a minor rally on March 13 following a Decrypt report that Bo Hines, executive director of the President’s Working Group on Digital Assets, told a select audience that “the White House is intent on acquiring as much Bitcoin as it can.”
A White House official confirmed that Hines had indeed made the alleged remarks at a closed-door roundtable at the Bitcoin Policy Institute. However, the official reiterated Trump’s caveats that the reserve would only add more BTC if it could be done “in a budget-neutral way that doesn’t cost taxpayers a dime.”
Hines was reportedly asked whether the White House supports the Bitcoin Act bill introduced last year by Sen. Cynthia Lummis (R-WY). The bill, which Lummis reintroduced last week, calls on the government to buy up to one million BTC—at a current cost of $80 billion-plus—by issuing new gold certificates based on the true market price of the gold in Fort Knox, the value of which hasn’t been updated in half a century.
Hines reportedly declined to endorse the Lummis bill, instead telling his audience that the White House would pressure Congress to enshrine the Strategic Bitcoin Reserve in law (at present, it’s simply an executive order, which can be undone by a future president).
Enter Rep. Byron Donalds (R-FL), who on March 14 introduced HR2112, aka The Reserve and Stockpile Act. The bill aims “to give the force and effect of law to” Trump’s executive order establishing the BTC reserve as well as the U.S. Digital Asset Stockpile (which will include other types of tokens already in the government’s possession).
Donalds issued a statement saying Trump “has pledged to make America the crypto capital of the world and his executive order establishing the Strategic Bitcoin Reserve and U.S. Digital Asset Stockpile does just that … I’m proud to introduce the ‘Reserve and Stockpile Act’ to cement this important policy win for America into law.”
Lummis may have failed to win Donalds’ backup on her bill, but Rep. Nick Begich (R-AK) announced plans last week to introduce a House bill (HR2032) that would not only enshrine the reserve in law but also mirror the Lummis bill’s buying scheme. HR2032 would also require the government to hold those BTC for a minimum of 20 years because, as Begich put it, the U.S. government “is not a day trader.”
Like Lummis, Begich wants to pay for this boondoggle by “reducing the discretionary surplus fund of the Federal Reserve” and requiring the Fed to “remit additional funds to the Treasury,” updating the Fed’s gold certificate values to balance the funky math.
Cease and desist already
On the other side of the aisle, some Democrats are trying to rein in Trump’s reserve strategies before they come up for a vote. On March 13, Rep. Gerald Connolly (D-VA) sent a letter to Treasury Secretary Scott Bessent urging him to “cease all attempts to create the strategic cryptocurrency reserve.”
Connolly, the ranking member of the House Committee on Oversight and Government Reform, made no distinction between the BTC reserve and the other token ‘stockpile,’ simply declaring that the government treating speculative tokens as strategic assets “provides no discernible benefit to the American people but would significantly enrich the President and his donors.”
Connolly said “no strategic need has arisen that would necessitate investment in the volatile and speculative cryptocurrency market.” Drawing a sharp line between tokens and “certain commodities of strategic value, such as petroleum” that have previously been included in strategic reserves, Connolly said a token reserve “would constitute nothing more than a highly speculative taxpayer-backed hedge” that would “primarily benefit the cryptocurrency industry.”
Taking aim at the personal crypto holdings of Trump, his family and his friends, Connolly claimed a token reserve would also “enrich the President and his closest allies at the expense of American taxpayers.”
I ain’t paying for this nonsense
Taxpayers appear to be more on Connolly’s side than Trump’s, according to a new poll by left-wing think tank Data for Progress. The poll found just 11% of respondents ‘strongly’ supported the creation of a strategic crypto reserve based on spending federal dollars, while a further 23% ‘somewhat’ supported the plan. Meanwhile, 29% strongly oppose and 22% somewhat oppose the plan, giving the ‘nays’ a 17-point advantage.
Support was higher among Republicans, but even here, the combined strongly/somewhat total was 41%, only one point higher than Republicans who oppose. Democrats were far more opposed, with a net -30 figure, while independents/third party supporters weren’t far behind at -26.
The poll also found only 10% of respondents think the government should fund “cryptocurrency and blockchain development,” as opposed to 45% who want to see fewer federal dollars spent in this area. Of the nine funding options in the poll, crypto/blockchain ranked dead last in terms of support.
Sacks doesn’t need a waiver, takes it anyway
Speaking of Trump allies benefiting from his pro-crypto moves, we learned last week that David Sacks was issued a limited waiver on his digital asset conflicts of interest by the White House on March 5. The White House concluded that “the financial interests covered by this waiver are not so substantial as to be deemed likely to affect the integrity of your services to the government.”
A couple of days prior to this waiver being issued, Sacks publicly refuted claims that he stood to financially benefit from the crypto policies he and the government were crafting. Sacks said he’d sold “all my cryptocurrency … prior to the start of the administration.” Sacks also denied that he stood to benefit from his investment in Bitwise Asset Management, which holds many of the tokens expected to make up the digital asset stockpile.
The waiver claims that Sacks and his Craft Ventures “sold all your liquid cryptocurrency” as well as: his position in a Bitwise exchange traded fund; his shares in publicly traded digital asset firms Coinbase (NASDAQ: COIN) and Robinhood (NASDAQ: HOOD) and similar private companies; and his limited partner interests in Blockchain Capital and Multicoin Capital. Sacks also “initiated the sale” of his limited partner interests in Sequoia Funds and “approximately 90 other venture capital funds” that might hold stakes in digital asset operators.
The waiver claims the above assets divested by both Sacks and Craft Ventures represented “over $200 million of positions related to the digital asset industry, of which at least $85 million is directly attributable to you.” The waiver notes that Sacks’ personal divestitures “have come at a significant tax cost.”
But as some online critics observed, Sacks “wouldn’t need a conflict of interest ethics waiver if he were fully divested.” Indeed, the waiver acknowledges that Sacks hasn’t divested from his interests in BitGo and Lightning Network developers Lightning Labs, “which respectively represent less than 2.5% and less than 1.2% of your total investment assets.”
Digital asset custodian BitGo, which is reportedly discussing taking itself public later this year, was among the digital asset operators who sent representatives to the White House crypto summit. BitGo would presumably be in the running to custody the digital assets that will make up the BTC reserve and the digital asset stockpile.
Before the waiver was made public, Sen. Warren wrote Sacks a letter seeking additional information on how he’d “addressed your conflicts of interest, and how you will prevent the President and other private individuals from directly profiting off of the Trump Administration’s efforts to selectively pump the value of certain crypto assets, drop crypto asset-related enforcement actions, and deregulate the crypto asset industry.” Something tells us Warren is still waiting on that answer.
Watch: Stablecoins with Daniel Lipshitz
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