The U.S. Senate will soon vote on Tuesday regarding the progress of legislation to create a new framework for cryptocurrencies. This vote is seen as a significant test in an election year for the $2.3 trillion cryptocurrency market, while many Democrats believe this action is not sufficient to control the investments of former President Donald Trump.
Political and Ethical Challenges
The vote comes with only two months remaining until the midterm elections. The cryptocurrency industry has become an important political force, and Trump amassed significant wealth from this sector during his presidency. While some Democrats support creating a legal framework, the party has largely united against the law unless it contains strong ethical guarantees to prevent the enrichment of the president and his family while in office.
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Elizabeth Warren, the Democratic senator from Massachusetts and chair of the Senate Banking Committee, said in her speech on the Senate floor: "Do not let a cryptocurrency law pass that allows Donald Trump to earn billions from cryptocurrency profits while working-class families in this country struggle with rising prices and a deteriorating economy."
Proposals and Amendments
While Democrats continue to block this bill, Trump has agreed to some ethical proposals, including new restrictions for elected federal officials regarding the issuance of digital assets. On Sunday, Trump agreed to further concessions, including granting additional powers to state attorneys general, which Democrats had requested.
However, these concessions appear to be insufficient for most Democrats. The proposal from Democratic Senator Ruben Gallego of Arizona and Republican Senator Thom Tillis of North Carolina sought to require Trump to place his cryptocurrency assets in a blind trust and divest them upon reaching a certain value.
Gallego stated that the new version of the bill is "very disappointing" and does not seem to be the final agreement. He also announced that he would present a counter-proposal, but it is unclear whether the two sides will be able to reach an agreement before the vote on Tuesday afternoon.
The Trump family has gained significant profits in the cryptocurrency sector since his re-election, including a meme cryptocurrency that was announced the day before Trump took office for his second term. Top investors were invited to a private reception with the president.
The Trump family also holds a controlling stake in World Liberty Financial, a cryptocurrency company founded with the special representative of the president, Steve Witkoff. In his annual report, Trump reported over $500 million in revenue from the sale of this company's cryptocurrency products, including "governance tokens." This is a significant portion of the over $1.4 billion that Trump reported from cryptocurrency businesses last year.
A bill passed last year to regulate stablecoins prohibited members of Congress and their families from profiting from these assets, but these restrictions did not extend to Trump and his family.
The Future of Cryptocurrency Legislation
Republicans, who have worked on this bill for a year, say that if the U.S. Senate does not vote on Tuesday, the bill may be indefinitely stalled. The House of Representatives and the Senate will not be in session in October before the elections, and the dynamics may change significantly if Democrats regain control of the House or Senate in November.
Republican Senator Cynthia Lummis of Wyoming, a key supporter of this bill, said that a negative vote means "opposing real ethical reforms in politicians' personal investments, ceding American leadership in digital assets to foreign competitors, and leaving Americans without any support in the digital asset market."
Supporters of this bill say its goal is to create greater legal certainty for the industry and protect consumers by establishing a comprehensive set of legal and regulatory requirements. In contrast, opponents, primarily Democrats, argue that this action benefits the industry, which strongly supports this bill and has become a major donor to candidates in both parties.
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