The efforts to pass the key cryptocurrency bill in the U.S. Senate are facing significant delays. The pause is caused by the ethical concerns surrounding U.S. President Donald Trump’s alleged financial ties to a controversial crypto deal. Headed by Senator Elizabeth Warren, the Senate is now second-guessing the crypto bill as claims of corruption are halting the process.

Senators Elizabeth Warren and Jeff Merkley sent a letter to the Office of Government Ethics on May 5 in which they asked for an investigation into a $2 billion investment plan involving the UAE-backed company MGX, World Liberty Financial (WLFI), and Binance. At the center of this enquiry is the WLFI’s USD1 stablecoin, which is reported to be the asset of choice in investment. 

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Ethical Concerns Regarding the Crypto Bill

The senators believe that this deal with MGX may violate the U.S. Constitution’s Emoluments Clause and federal bribery laws. They have also warned that President Donald Trump and his allies could receive millions of dollars through what they call a “backdoor for foreign influence and self-enrichment.”

The letter states, “This deal raises the troubling prospect that the Trump and Witkoff families could expand the use of their stablecoin as an avenue to profit from foreign corruption.”

Controversies Halting the GENIUS Bill

To further fuel the fire, President Trump hosted a $1 million-per-plate fundraiser, and soon after that, he also hosted a $1.5 million-per-plate dinner at his Virginia golf club. He is also set to host a gala for holders of the TRUMP memecoin on May 22, an event that has drawn sharp criticism from lawmakers.

Relevant reads: US Senate to Vote on Historic Stablecoin Bill Ahead of the Memorial Day

All of this political unrest comes as the Senate is considering the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act. Due to these controversies, the bipartisan support for the GENIUS Act is dying out. Some Democrats are demanding an additional hearing, as they have concerns about the President’s personal interests in the digital assets influencing legislation.

Senate Majority Leader John Thune has indicated a willingness to negotiate amendments to the GOP-backed bill to gain bipartisan support. However, internal Republican divisions and Senator Rand Paul are reportedly hesitant to back the bill. The controversy has also spread to the House, where Representative Maxine Waters is moving to block a Republican-led hearing on digital assets scheduled for May 6.

Effects on the Digital Assets Market

Amid this mess, important public figures in the crypto community are criticizing the political deadlock. Tyler Winklevoss, co-founder of Gemini, posted on X: “If they want Democrats to continue losing elections, they will continue standing in front of crypto legislation.” The future of crypto regulation now hangs in the balance, entangled in one of the most politically charged debates.