Elizabeth Warren on Why the Crypto Bill GENIUS Act Creates a Superhighway for Trump Corruption

The Democratic senator is sounding the alarm over the GENIUS Act, which will put financial power in the hands of Big Tech. What could go wrong?

https://www.rollingstone.com/politics/politics-features/elizabeth-warren-crypto-bill-genius-act-bad-idea-1235362570/

https://archive.ph/UFalO



June 12, 2025

The Senate is set to pass the GENIUS Act early next week, a controversial piece of cryptocurrency legislation that critics say will hand an undue amount of financial power to the tech industry. On its face the bill, which has advanced with bipartisan support, purports to offer a regulatory framework for the expansion of “stablecoins,” a form of crypto pegged to an existing, recognized asset — in many cases the U.S. dollar. In reality, it could enable corruption, screw over taxpayers, and potentially destabilize the economy. The GENIUS Act would allow banks and private companies to issue stablecoins, essentially their own currencies, with light oversight from regulators. It mandates that issuers of stablecoins hold a reserve of the stable asset backing their cryptocurrency at all times, and that firms abide by certain anti-money laundering laws, as well as U.S. sanctions against foreign entities.

It sounds like a step in the right direction, but this piece of legislation is working its way through Congress as sitting President Donald Trump and his family build a cryptocurrency empire that steamrolls anti-corruption laws and ethical norms — one they hope will flourish under the industry-friendly policies and laws created by the administration of the Trump patriarch. One of Trump’s priorities has been the normalization of these so-called stablecoins — a type of asset that his family is now hawking. Despite the moniker, stablecoins can be extremely unstable. A 2023 study published by the Bank for International Settlements found that of 60 stablecoins analyzed in their review, all of them had become de-pegged from their underlying asset at least once. The 2022 crypto crash was triggered by the failure of Terraform Lab’s Terra/Luna “algorithmic” stablecoin — the collapse of which saw $45 billion erased in the span of a week.

The stablecoin bill comes as the government reorients its approach to crypto. Under the Biden administration, crypto kingpins began to feel the sting of consequences for schemes gone wrong. FTX crypto exchange founder Sam Bankman-Fried was sentenced to 25 years in prison after carrying out one of the largest financial scams since Enron. Tether, the largest stablecoin in crypto, settled a lawsuit brought against it by New York Attorney General Letitia James in 2021. Changpeng Zhao, the founder of the global crypto exchange Binance, pleaded guilty to money laundering in 2023. Trump pledged a new, friendlier regulatory environment in Washington — and the crypto industry poured many millions into Super PACs to elect allies throughout Congress. Now, the industry has its moment to push through a public smokescreen of barely-there regulation, while continuing to rake in the cash.

No one has been more outspoken on the failings of the GENIUS Act than Sen. Elizabeth Warren (D-Mass.), who told Rolling Stone ahead of key votes that the bill would “create a superhighway for Donald Trump’s corruption.” The Trump family’s cryptocurrency venture, World Liberty Financial — which is currently being operated by his sons and Zach Witkoff, the son of Trump’s Middle East envoy Steve Witkoff — recently launched its own stablecoin, designated USD1, which is pegged to the U.S. dollar and backed by treasury bonds. The GENIUS Act would allow major tech companies, banks, and other financial institutions to issue their own stablecoins, and many are poised to buy Treasury bonds so they can back the digital currency with real assets, as is required. According to a report issued last week by ARK Invest, the stablecoin market may become one of the largest holders of U.S. debt in the coming years — potentially tying large swaths of U.S. debt to a dubiously regulated and often unstable asset. (For example, if Tether — the largest stablecoins in the market — was a country, it would be the 18th-largest holder of U.S. debt in the world.)

snip