The Senate has handed the crypto industry the legitimacy it has craved for years.
With the help of 18 Democrats, Senate Republicans passed the Genius Act this week, the first major code law in US history. The bill is heading home now.
In theory, the law establishes the first regulatory framework for the issuers of Stablecoins, a cryptocurrency fixed on assets such as the US dollar. But in reality, it opens the floodgates to corruption and financial collapse.
This bill reads more like a wish list for crypto lobbyists than a serious attempt at surveillance. It creates a toothless framework and has no real limitations on having no strict requirements to prove who can issue stubcoins or that the issuer has the assets to protect them.
May, Sen. Elizabeth Warren, D-Mass. called the law “charging Donald Trump’s crypto corruption profitability” a “gift to big technology.” And she’s not wrong.
We have grown too comfortably with Republicans in Congress in favour of this kind of inappropriate gift to Trump and his allies.
But why did members of the Democrats – Economic Equity and Transparency Party fall behind this? It could all be three words: Follow the money.
During the 2024 election cycle, Crypto’s profits poured over $200 million into campaigns that were primarily beyond the Fairshake PAC.
They were not subtle about their intentions. They wanted to shape how Washington regulates the code.
Sen. Reuben Gallego of Arizona is a leading democratic negotiator for Genius Law, receiving a direct donation of thousands from crypto executives and an increase of $10 million from Fairshake. The same goes for Michigan’s first term Sen. Elissa Slotkin. The encrypted ads also helped to remove sit-in members. Ask Sen. Sherrod Brown of Ohio. The crypto group spent $40 million against Brown, who was ultimately defeated by Republican Bernie Moreno.
The ads that helped defeat Brown were not about cryptography, but were kitchen table messaging designed to appeal to disillusioned swing voters. That worked. And it sent a cold message: resist the code and we’ll take you out.
To be clear, the code isn’t inherently bad, but it’s Wild Wild West right now, and that’s the problem.
Cryptocurrency has become the preferred tool for bad actors around the world. Terrorist groups used it to move money outside the traditional banking system. Drug cartels and traffickers rely on it to hide financial transactions. Ransomware gangs from North Korea to Eastern Europe require billions of payments in crypto, often untraceable and irreparable.
The FBI reports that losses from crypto fraud totaled $5.6 billion in 2024.
That’s exactly why the Biden administration first carefully approached code. Rather than curbing innovation, protecting consumers, national security and financial systems from abuse. It called for stricter rules to “know customers” and pushed back Crypto’s use as a shadow banking system, highlighting everything from avoiding the risk of unregulated digital assets to illegal finance.
But now under the second Trump administration, the stance has changed, and that’s not a coincidence.
Trump wasn’t necessarily a crypto cheerleader. In 2019, he dismissed it as “based on thin air” and “not money.” But now, Trump is quietly building his own crypto empire. He recently held a private dinner with top Trump-themed memecoin investors and has made profits through family interests in World Liberty Financial, the company that launched its own stubcoin, USD1.
The US President is now profiting from an industry where his administration is regulated, unchecked and seemingly unruly. Unlike members of Congress who are currently prohibited from making personal profits from Stablecoin Investments, the president and his family are not facing such restrictions.
Meanwhile, crypto groups such as Stand with Crypto are scoring council members in a way that the National Rifle Association wins gun votes. They have not yet approved the candidate, but there is no mistake. They have a foundation.
The House has written its own version of the bill, called Stable Act, and Trump says he wants something on his desk before his August break.
So what is at risk? This is not just about digital currency. This is about power. Who can hold it, who can pay it, who can write the rules. If you learn something from housing accidents and the rise of major technology monopolies, if you write regulations that are regulated, the public will certainly be lost.
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This article was originally published on MSNBC.com
