Senator Rips GENIUS Act, Alleges Trump Cashing In On USD1 Coin

United States Sen. Elizabeth Warren is urging Congress to reject the GENIUS Act, a bill that would potentially pave the way for what she terms “crypto corruption.”

The bill – the Guiding and Establishing National Innovation for US Stablecoins Act – has been gathering steam after initial bipartisan support. At least 10 senators now have reversed their support, citing issues of lax money laundering safeguards and national security threats.

Rising Token Fosters Backlash

The bill’s sharpest critic so far is Warren, who pointed to a recent deal involving World Liberty Financial (WLFI), a company linked to US President Donald Trump, and MGX, a firm based in the United Arab Emirates.

The deal involves WLFI’s USD1 stablecoin and a $2 billion investment connected to Binance. Warren says the agreement pushed USD1’s market activity into overdrive and helped it rise to become the seventh-largest stablecoin in the world.

The Trump family stablecoin surged to 7th largest in the world because of a shady crypto deal with the United Arab Emirates—a foreign government that will give them a crazy amount of money.

The Senate shouldn’t pass a crypto bill this week to facilitate this kind of corruption. pic.twitter.com/4is9KgpXQb

— Elizabeth Warren (@SenWarren) May 4, 2025

She claimed that the Trump family could gain a “crazy amount of money” from what she described as a “shady crypto deal” with a foreign government. “The Senate shouldn’t approve a crypto bill this week to enable this type of corruption,” she wrote on X.

Support For GENIUS Act Fades Quickly

Support for the GENIUS Act has fallen significantly. Ten senators, including Ruben Gallego, have now dropped their support. They’ve raised red flags regarding the bill’s inability to define explicitly how it would prevent illegal financial activities. There are also concerns that the legislation lacks adequate penalties for stablecoin issuers who violate rules.

The senators also worry about the potential threat of foreign-controlled stablecoins to US financial systems. In their joint statement, they caution that without stricter regulations, foreign powers could manipulate loopholes in the bill.

NEW: Senator @RubenGallego and nine other senators just issued a joint statement regarding the updated text of the GENIUS Act that was released last week, saying they cannot support the bill in its current form. The group notes several concerns, including insufficient… pic.twitter.com/876m4wCVda

— Eleanor Terrett (@EleanorTerrett) May 3, 2025

For WLFI, the timing could not be any worse. The firm is now postponing listing USD1 on centralized exchanges. WLFI waits for regulatory clarity before proceeding, but the lost momentum can be damaging to the stablecoin’s prospects in the already saturated market.

Lacking a clear way forward, USD1 might find it difficult to compete with the likes of Tether. The uncertainty now is creating tension for the Trump-backed crypto venture, which had been expecting the GENIUS Act to offer the framework that it would use to grow.

The GENIUS Act was poised to go to a vote in the House in May. But with support fading in the Senate, there’s no way of knowing when — or if — that vote will occur.

Crypto-friendly lawmakers in Congress had believed the bill would introduce much-needed regulation to the stablecoin market. Now, it’s caught up in a political tempest.

Based on reports, the Trump administration didn’t anticipate this level of resistance. But as questions grow around WLFI’s UAE ties and the USD1 surge, opponents of the bill are digging in. The Senate’s growing skepticism could end up blocking the bill altogether.

Featured image from REUTERS/Brian Snyder, chart from TradingView