Democrats Woke Up to Trump's Crypto Grift. Will They Stop Other Scammers?

Cryptocurrency regulation once seemed to be the rare issue that could draw bipartisan advocacy in Donald Trump s Washington thanks to the industry s prolific donations on both sides of the aisle Then Trump and his family attempted to monetize the presidency through a meme coin and a billion crypto deal involving an Abu Dhabi-backed venture firm Democrats were suddenly outraged Specific centrist party members who had treated cryptocurrency with deference even began to walk away Nine Senate Democrats pulled their patronage for so-called stablecoin rule over the weekend imperiling the industry s the bulk likely legislative win this year Meanwhile Rep Maxine Waters D-Calif blocked a House hearing on a broader more ambitious crypto framework on Tuesday leading several Democrats in a walkout Trump may just cause enough polarization to make crypto skepticism mainstream within the Democratic Party The industry is still pushing for a vote on the statute in the Senate where Democrats continue to work on a expected compromise Yet for skeptics who have had their warnings about crypto s threat to the commercial sector ignored for years Democrats sudden conversion was heartening They just wished it hadn t taken Trump to wake the party up Crypto has been able to buy so a large number of Democrats because there was no organized opposition and thus little downside to politicians selling their vote noted Jeff Hauser a longtime critic of the industry and executive director of the Revolving Door Project Trump may just cause enough polarization to make crypto skepticism mainstream within the Democratic Party Sporadic Opposition The industry s bipartisan alliances were on display last May as the House debated its favorite law the Financial Innovation and Mechanism for the st Century Act Out of Democrats joined with Republicans to give overwhelming backing to FIT as it is known though the bill did not proceed to a vote in a Senate The regulation is aimed creating a framework that would largely shield the industry from oversight by the Securities and Exchange Commission which is viewed as having the sharpest regulatory bite Related Here s How Much the Guests at Trump s Crypto Summit Donated to His Inauguration The industry seemed even better positioned this year thanks to Trump s electoral process and a record-breaking million spending spree on the campaigns All the cash helped knocked hostile Democrats out of primaries and propel industry-friendly candidates in the general referendum Analysts predicted that after the new Congress was sworn in Democrats skeptical of the industry would hold their tongue for fear of facing well-funded primary challengers Trump and his family s rapid move into the industry though seems to have changed the calculation for particular Democrats The White House has mentioned that the Trump family s crypto deals raise no ethical concerns because Trump s business interests are held in a trust that his sons run Trump s Schemes In September Trump s sons helped launch a crypto marketplace called World Liberty Financial Hours before his inauguration the Trump Organization launched a Trump meme coin that has now generated more than million in transaction fees according to a contemporary analysis Then last week World Liberty Financial reported the massive deal with the Emirati firm which planned to use the company s tokens to make a transaction with the crypto exchange Binance according to a statement in the New York Times By that point the bipartisan mood on Capitol Hill was already beginning to sour Waters expressed openness to measure dealing with stablecoin last year In March however the Trumps communicated that they would be issuing a stablecoin of their own Waters on April tried to amend a stablecoin bill in the House Financial Services Committee where she serves as ranking member to prohibit the Trump family from issuing one that benefits the president Related Trump s Very Stable Genius Coin Republicans rejected her bid and the bill passed out of committee with encouragement from several Democrats including a few who have drawn hundreds of thousands of dollars in donations from the industry Then as news of World Liberty Financial s Abu Dhabi deal circulated Sen Ruben Gallego D-Ariz led eight other Democrats in announcing Saturday that they were backing off their sponsorship for a similar stablecoin bill in their chamber imperiling its chances of overcoming a filibuster Though Gallego and several of his colleagues had just voted for the bill in committee they now mentioned it has numerous issues that must be addressed including adding stronger provisions on anti-money laundering foreign issuers national shield preserving the safety and soundness of our financial system and accountability for those who don t meet the act s requirements Gallego s report may have had a special sting for the industry which spent million in super PAC funds helping him win his Senate race last year In a joint report Monday three leading crypto agreement organizations stated they still hoped the Senate would advance the measure A comprehensive regulatory framework will enable widespread and increased stablecoin adoption the groups commented which is essential to cementing U S dollar dominance in the digital financial system According to Axios Senate Majority Leader John Thune R-S D is still planning to hold a vote on the stablecoin bill on Thursday and the measure s sponsors are hoping to strike a deal to revive the measure Waters Walks Out On Tuesday Waters ratcheted up pressure on the industry by objecting to a joint House Financial Services and Agriculture committee meeting on the newest iteration of the FIT bill I object to this joint hearing because of the corruption of the president of the United States and his ownership of crypto and his oversight of all the agencies I object Waters declared Rep French Hill R-Ark the chair of the Financial Services Committee stated the hearing had been negotiated with Democrats for weeks Through her actions in current times the ranking member has thrown partisanship into what has historically been a strong good bipartisan relationship Hill disclosed Republicans and a few of the committees Democrats continued holding a more informal roundtable as Waters marched over to a different building for a hearing of her own At Waters s breakaway hearing one witness mentioned Congress shouldn t just take a hard line on the Trumps since specific of World Liberty Financial s majority of problematic practices are mirrored by other leading companies In countless tactics the Trump family is merely copying common crypto business practices World Liberty Financial markets itself as the future of decentralized finance On its website the company says that its governance system based on a special token that can be bought but not traded ensures that every WLFI owner has an equal voice From submitting proposals to casting votes your participation is key to shaping our decentralized platform Yet it is controlled by a small set of insiders who stand to profit at the expense of retail customers according to Mark Hays associate director for cryptocurrency and financial system at Americans for Financial Revision and Demand Progress While it is entirely right for members of Congress to raise concerns about how actions of the Trump presidency distort good policymaking and threaten the inhabitants interest none of us here should lose sight of the fact that in various solutions the Trump family is exclusively copying common crypto business practices Hays mentioned In other words a large number of of the foreseen issues we see with the Trump family s crypto practices are a feature not a bug of the crypto industry Neither the Trump Organization nor World Liberty Financial right away responded to a request for comment on the company s governance structure Waters s effort to disrupt the House hearing pointed to a continuing divide among Democrats While six other Democrats joined her several remained at the main hearing featuring industry observers including Rep Angie Craig of Minnesota the House Agriculture Committee ranking member I think that with more publicity around the corruption they re going to pay more attention Democrats who stayed drew supportive statements from one of the industry s biggest players Coinbase Craig and the other Democrats who stayed did however criticize the Trump family s deals It is corrupt it is wrong and it makes this process of coming together to regulate crypto more partisan than it requirements to be Craig disclosed In the Senate Gallego and his colleagues comment focused on the substance of the stablecoin bill rather than on the Trumps attempts to enrich themselves In an interview with The Intercept Waters predicted that Democrats focus will soon shift to Trump It s coming she revealed I think that yes they had particular real issues but I think that with more publicity around the corruption they re going to pay more attention The post Democrats Woke Up to Trump s Crypto Grift Will They Stop Other Scammers appeared first on The Intercept