Sen. Elizabeth Warren Urges Congress to Reject the GENIUS Act, Calling It “crypto corruption”

The bill – the Guiding and Establishing National Innovation for US Stablecoins Act – has been gathering steam after initial bipartisan support.

A bill that would potentially open the door for “crypto corruption” is still a threat despite the withdrawal of support from 10 senators, warns United States Sen. Elizabeth Warren.

The bipartisan measure, known as the Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS Act), has been a subject of controversy since its introduction. While initially enjoying bipartisan support, the bill faced a setback as 10 senators, including Ruben Gallego, dropped their support for the bill.

Their decision follows the release of an updated text of the GENIUS Act last week. The senators expressed concerns over the bill’s ability to prevent illegal financial activities and the lack of adequate penalties for stablecoin issuers who violate rules.

The senators also highlighted the threat posed by foreign-controlled stablecoins to the US financial system. They stated that without stricter regulations, foreign powers could manipulate loopholes in the bill to gain control over the US financial system.

Support For GENIUS Act Fades Quickly

The senators, who had previously announced their support for the bill in February, explained their decision to withdraw support in a joint statement.

“We had hoped to be able to support the GENIUS Act. Unfortunately, despite good-faith efforts by Chairman Crapo and Ranking Member Brown, the updated text of the bill does not address critical issues that would arise from foreign-controlled stablecoins and provide the level of consumer protection needed for this new technology,” the senators wrote in their statement.

Their statement added: “In the coming weeks, we will continue to work with Chairman Crapo, Ranking Member Brown, and other colleagues on legislation that would provide comprehensive and durable regulation for stablecoins.”

The GENIUS Act, which was initially introduced in March 2024, aimed to create a regulatory framework for stablecoins in the US. The bill proposed requiring stablecoin issuers to register with the Federal Reserve and maintain adequate capital reserves.

The bill's supporters argued that it would promote financial stability and innovation by providing clear rules for the rapidly growing stablecoin sector. However, opponents of the bill raised concerns about its potential to concentrate economic and political power in the hands of a few large technology companies.

The bill's opponents also expressed concerns about the bill's limited protections for consumers and the potential for stablecoins to be used for money laundering and other illegal activities.

Despite the challenges facing the GENIUS Act, lawmakers are still working to complete legislation this year to regulate stablecoins. Stablecoins are a type of cryptocurrency that is designed to maintain a stable value relative to a fiat currency, such as the US dollar.

The bipartisan measure, which has the backing of House Financial Services Chair Maxine Waters and the top Republican on the panel, has been a priority for crypto-friendly lawmakers in Congress who believe it would introduce much-needed regulation to the stablecoin market.

The bill had been set for a vote in May, but with support fading in the Senate and new questions arising about the Trump family's ties to a crypto firm in the United Arab Emirates, it remains to be seen if that vote will come.

House Vote Remains Uncertain

The bill, which is being led by Senate Banking Chair Pat Toomey and Ranking Member Bill Harris, passed the Senate in December 2024. It had been expected to go to a vote in the House in May.

But now, the bill has hit a snag as 10 senators have dropped their support for the measure.

In a joint statement, the senators, who include both Democrats and Republicans, said they had hoped to be able to support the GENIUS Act, but they cannot in its current form.

The senators, who are all members of the Senate Banking Committee, said they have serious concerns about the bill's inability to define explicitly how it would prevent illegal financial activities and the lack of adequate penalties for stablecoin issuers who violate rules.

Their statement reads: "We are also deeply concerned by the potential threat of foreign-controlled stablecoins to the US financial system. Without stricter regulations on foreign involvement, foreign powers could manipulate loopholes in the bill to gain control over the US financial system."

The senators added that they will continue to work with Chairman Crapo, Ranking Member Brown, and other colleagues on legislation that would provide "comprehensive and durable regulation" for stablecoins.

The news comes as the Trump family's ties to a crypto firm in the United Arab Emirates are coming under scrutiny.

World Liberty Financial (WLFI), which is linked to the US president's family, is planning to list its USD1 stablecoin on centralized exchanges. However, WLFI has now postponed the listing as it waits for regulatory clarity.

The company's stablecoin has become the seventh-largest in the world, and it is being used to siphon money out of the US and into the bank accounts of the Trump family, according to Sen. Elizabeth Warren.

"A Trump family stablecoin has surged to 7th largest in the world because of a shady crypto deal with