Worries about Trump’s potential conflict of interest are hindering the advancement of comprehensive cryptocurrency policy.

Discussions concerning the financial gain and possible conflicts of interest related to U.S. President Donald Trump’s involvement in cryptocurrency have intensified recently. These issues are hindering not just the advancement of stablecoin regulation but also wider crypto policy initiatives. Ryan Gilbert, the founder of Launchpad Capital, expressed disappointment about the situation, stating that personal business interests should not obstruct important policymaking.

The GENIUS Act, which aims to create a regulatory framework for U.S. payment stablecoins, is seen as a key piece of legislation. Katrina Paglia, the chief legal officer at Pantera Capital, remarked that this bill was viewed as likely to pass more easily than others. Therefore, she felt let down when it failed to pass in the Senate by a close vote of 48-49, although she noted that it was not entirely unexpected.

Concerns about ethical implications regarding Trump’s financial benefits from cryptocurrencies stalled discussions about a draft market structure bill scheduled for May 6. This legislation was designed to offer essential regulatory guidance on how the SEC and CFTC would classify and manage digital assets.

In the days leading up to Trump’s inauguration, he introduced the $TRUMP memecoin, which reportedly surged to a peak price of $75 on January 19. However, following his inauguration, the value of $TRUMP plummeted, resulting in small investors losing over $2 billion, while companies tied to Trump garnered approximately $100 million in trading fees as of January 30.

In March, discussions surfaced about the Trump family’s interest in obtaining a stake in the U.S. division of Binance, which had previously faced significant penalties for breaching anti-money laundering regulations. The Senate Banking Committee passed the GENIUS Act on March 13, and shortly thereafter, World Liberty Financial, a decentralized finance project associated with Trump, revealed plans for a stablecoin called USD1.

An investment from the Abu Dhabi firm MGX into Binance was announced on March 12, and by May 1, it was confirmed that USD1 would be used to facilitate the transaction. Notably, MGX is chaired by Sheikh Tahnoon bin Zayed, the UAE’s national security adviser and brother of the UAE president. Additionally, the state-owned Mubadala fund based in Abu Dhabi has ties to MGX.

In late April, Trump hosted the top 220 holders of his memecoin for a private dinner on May 22, prompting Democratic Senator Jon Ossoff to describe the situation as potentially warranting impeachment. Recently, reports emerged that insiders earned close to $100 million from purchasing Melania Trump’s memecoin just hours prior to its public release.

The discussion around the GENIUS Act, which was anticipated to progress smoothly, faced obstacles last weekend when nine Senate Democrats, including several previous supporters of the bill, indicated they would not endorse it unless national security and money laundering elements were addressed.

On May 6, Representative Maxine Waters utilized the time reserved for discussing the crypto market structure bill to voice her concerns about “Trump’s corruption,” highlighting that he profited significantly from his memecoin and insinuating that his campaign promises were more about self-enrichment than benefiting Americans.

During the same session, a Treasury Department advisor labeled Trump’s cryptocurrency activities as a mechanism for influence manipulation, while Representative Stephen Lynch noted that a significant portion of Trump’s wealth derived from these ventures.

Senator Mark Kelly put forth the End Crypto Corruption Act on May 7 to prevent members of Congress and their families from having any involvement in crypto assets. He emphasized that Trump’s profits from these coins were an outright display of corruption.

In a letter sent on Friday, Senate Democrats asked key officials to look into Trump’s connections with Binance, while former Binance CEO Changpeng Zhao, who has faced legal issues, has sought a pardon from Trump. Senator Jeff Merkley criticized the current situation, describing it as a fundamentally corrupt scheme allowing personal enrichment through cryptocurrency purchases.

Despite these conflicts of interest, lawmakers from both parties have resumed negotiations following the recent vote failure and may reconsider the GENIUS Act as soon as next Monday. Many expect the bill will eventually pass through the Senate and reach Trump’s desk, though uncertainties regarding timing persist amid ongoing concerns.