Senator Warren Plans GENIUS Act Amendment to Block Trump Family’s Crypto Wallet

The Guiding and Establishing National Innovation for US Stablecoins (GENIUS Act), a bipartisan effort to regulate stablecoins, is approaching a pivotal moment in the U.S. Senate. Following a successful cloture vote in May, the bill is now under active discussion, with Republican and Democratic leaders aiming for a unanimous consent agreement to streamline voting on amendments and potentially pass the legislation this week. However, Senator Elizabeth Warren has raised concerns about a late-stage provision exempting crypto wallets from stricter oversight, citing potential ties to the Trump family’s wallet plans. Warren pledged to introduce an amendment to address the loophole, emphasizing that the bill should not pass without significant anti-corruption reforms.

Warren’s Concerns: The Crypto Wallet Loophole

On June 4, Senator Elizabeth Warren took to X to criticize a carveout in the GENIUS Act that she claims exempts crypto wallets from stricter oversight. “The GOP slipped a last-minute carveout for crypto wallets into the GENIUS Act—and now the Trump family is planning to launch one,” Warren posted, vowing to introduce an amendment to close this loophole. She argued that the bill “shouldn’t pass without serious anti-corruption fixes” to prevent potential misuse, particularly in light of reports linking the Trump family to a crypto wallet initiative.

Warren’s comments were spurred by a June 3 announcement from Magic Eden, a leading NFT marketplace, which revealed a partnership with the TRUMP memecoin team to launch an “Official TRUMP Wallet.” The announcement sparked speculation about ties to the Trump family, given the branding. However, Donald Trump Jr. quickly clarified on X that the Trump Organization has no affiliation with Magic Eden’s wallet, stating that World Liberty Financial (WLFI), a Trump-associated entity, is preparing to launch its official wallet. News of WLFI’s upcoming crypto wallet has heightened concerns among Democratic senators like Warren about potential conflicts of interest, with some arguing that the Trump family is leveraging the former president’s influence and pro-crypto policy stance to advance their cryptocurrency ventures.

Latest Developments on the GENIUS Act Amendments

The GENIUS Act aims to establish a comprehensive regulatory framework for stablecoins, addressing custody rules, anti-money laundering (AML) protocols, and compliance with the Bank Secrecy Act (BSA). The bill’s proponents, including key Republican and Democratic senators, are pushing for swift passage to provide clarity for the growing stablecoin market, which has seen its market capitalization surpass $249 billion globally, according to DefiLlama.

In May, the GENIUS Act passed a critical cloture vote, allowing it to proceed to full Senate consideration. Since then, a series of amendments have been under discussion. According to crypto reporter Eleanor Terrett, proposed amendments include new disclosure requirements for government officials holding stablecoins, a priority for Democratic Senator Adam Schiff of California; a ban on Chinese and foreign adversary ownership of stablecoin issuers, pushed by Republican Senator Tommy Tuberville of Alabama; and reforms to the Bank Secrecy Act and anti-money laundering rules, supported by Republican Senator Mike Lee of Utah. Senator Elizabeth Warren, the top Democrat on the Senate Banking Committee, is also expected to advocate for additional amendments.

Additionally, Senator Roger Marshall (R-KS) has proposed an amendment to attach the Credit Card Competition Act (CCCA) to the GENIUS Act. The CCCA aims to establish a government credit card routing mandate to address network access and competition issues in electronic credit card transactions. This controversial measure has faced strong opposition from banks and card networks. Republican Senator Thom Tillis of North Carolina has warned that he will withdraw support for the GENIUS Act if the CCCA is included.

Market Context

The debate over the GENIUS Act coincides with a booming stablecoin market. Stablecoins’ widespread use in DeFi and cross-border payments, coupled with the regulatory optimism following the bill’s procedural progress, has fueled high expectations for the industry’s future. Circle, the issuer of USDC, the world’s second-largest stablecoin, recently completed its IPO on the NYSE, raising $1.1 billion at a $6.9 billion valuation, with subscriptions oversubscribed by over 25 times.

Amid this market enthusiasm, crypto industry stakeholders are actively pushing for the GENIUS Act’s advancement. The Blockchain Association, Crypto Council for Innovation, Digital Chamber, and DeFi Education Fund issued a joint statement emphasizing the bill’s goal of providing a comprehensive regulatory framework for stablecoins and urging lawmakers to maintain momentum. Additionally, a poll from the nonprofit Cedar Innovation Foundation, linked to the Fairshake super PAC, found that 58% of surveyed voters believe existing financial regulations are insufficient for cryptocurrencies, 74% want Congress to establish “clear rules of the road” balancing consumer protection and innovation, and 61% support new federal crypto laws, with bipartisan support.

Looking Ahead

The GENIUS Act’s fate remains uncertain as the Senate navigates bipartisan negotiations. A unanimous consent agreement could lead to a swift vote, followed by limited debate, potentially allowing the bill to pass this week. However, Warren’s proposed amendment and broader concerns about loopholes could delay progress or alter the bill’s final form. If no agreement is reached, procedural hurdles may slow the process, potentially pushing the final vote to next week.