Senate Democrats are rebelling against a crypto regulation bill, putting the legislation in jeopardy

Washington — Senate Democrats are rebelling against a crypto regulation bill, putting the first-of-its-kind legislation in jeopardy ahead of a possible key vote.

Senate Democrats are bailing on a key vote later this week to launch a regulatory framework for stablecoins, potentially derailing the first-of-its-kind legislation amid concerns over President Trump and his family’s business ventures.

The GENIUS Act, which stands for "Good Enforcement Needed In Securing Useful Legislation," advanced out of the Senate Banking Committee in March with bipartisan backing. But the bill has since bled Democratic support.

The legislation is expected to come up for a procedural vote on Thursday, which will require 60 votes to proceed. However, the vote is likely to be close, with several Democrats planning to vote no.

The bill passed through the committee weeks before the announcement earlier this month that an Abu Dhabi-backed firm will invest billions of dollars in a Trump family-linked crypto firm, World Liberty Financial. The deal will involve the firm buying $2 billion worth of a stablecoin offered by World Liberty Financial, and using it to invest in crypto exchange Binance.

The news set off alarm bells for Democrats, who are now pushing for legislation that bans elected officials and their families from buying or selling crypto assets, including stablecoins.

Last week, Senate Minority Leader Chuck Schumer, D-N.Y., told his members that they should not commit to voting for the GENIUS Act as a way to leverage changes, according to a source familiar with the discussions. Talks between Republicans and Democrats about potential changes are still ongoing.

Senate Majority Leader John Thune, R-S.D., has signaled openness to modifications, but told reporters Tuesday "we need to start moving forward." A procedural vote is expected Thursday, despite the opposition.

Democratic Sen. Elizabeth Warren of Massachusetts, the top Democrat on the Senate Banking Committee, has circulated a fact sheet to all Senate Democrats highlighting how the stablecoin bill falls short on safeguarding against corruption, as well as protecting consumers, the financial system and national security.

The fact sheet’s lead recommendation is for elected officials and their families to be barred from owning, buying, selling or otherwise participating in stablecoin business ventures.

“Congress is writing laws that will sharply increase or decrease the value of stablecoin businesses, and the public should know that no one is making decisions to further their own financial interests, including the President of the United States. The current version of the GENIUS Act contains no such restrictions,” it says.

In a statement to CBS News, Warren said, "Democrats who both support and oppose the GENIUS Act agree that green lighting Donald Trump's corrupt stablecoin deals is wrong. We need to make sure we fix this in the bill, or else the GENIUS Act will simply facilitate Trump's crypto corruption."

The request aligns with a separate bill introduced by Democratic Sen. Jeff Merkley of Oregon on Tuesday. The bill, titled the End Crypto Corruption Act, would prohibit the president, vice president, members of Congress, senior officials in the Executive Branch and their immediate families from financially benefiting from crypto assets.

“Currently, people who wish to cultivate influence with the President can enrich him personally by buying cryptocurrency he owns or controls,” Merkley said in a statement. “This is a profoundly corrupt scheme. It endangers our national security and erodes public trust in government. Let's end this corruption immediately.”

The bill is cosponsored by 10 other Democrats, including Sens. Kirsten Gillibrand of New York and Angela Alsobrooks of Maryland, who were the original cosponsors of the GENIUS Act.

On Wednesday, Sen. Bernie Sanders, I-Vt., will hold a roundtable with crypto experts to highlight the GENIUS Act's "serious risks" to the U.S. economy.

The Trump family's ventures into new crypto products have increased their wealth by billions in the last six months, as his administration continues to loosen the federal government's regulatory approach to the digital currency industry as a whole.

The president's crypto holdings now make up nearly 40% of his net worth — or about $2.9 billion. That increase is due in part to his 2024 release of the $TRUMP and $MELANIA meme coins, in addition to a large stake in World Liberty Financial, which launched in October.

In response to the criticism, White House spokesperson Anna Kelly told CBS News in a statement that Mr. Trump's "assets are in a trust managed by his children, and there are no conflicts of interest."

"Stablecoin legislation should be passed on a bipartisan basis. President Trump is dedicated to making America the crypto capital of the world and revolutionizing our digital financial technology," she said.

In a statement last week, World Liberty said the Abu Dhabi deal marks the "single largest-ever investment in a crypto company" and sets a "historic precedent." The firm did not respond to questions about how much the Trump family stands to make from the investment.

Sen. Richard Blumenthal, D-Conn.,