On Sunday, US Senator Elizabeth Warren slammed the GENIUS Act for its potential to trigger an illegal windfall for Trump’s USD1 stablecoin. Warren is urging the rest of the Senate to reject the stablecoin legislation that once enjoyed bipartisan support in Congress.
President Donald Trump’s plan to roll out robust stablecoin legislation for the US has led to a barrage of unexpected problems. The latest is a refusal by US Senator Elizabeth Warren to endorse the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act.
According to an X post, Senator Warren is poking holes in the bill over concerns that its passage will net the Trump-backed World Liberty Financial (WLFI) an illicit fortune. The senator hinged her argument on WLFI’s latest deal with UAE-based MGX to lean on the USD1 stablecoin to close its $2 billion Binance investment.
The MGX arrangement saw the USD1 stablecoin record frenetic daily trading volumes and an increase in its market capitalization. Elizabeth Warren urged the Senate to reject the GENIUS Act on the grounds of unjust enrichment ahead of a full House vote.
“The Trump family stablecoin surged to 7th largest in the world because of a shady crypto deal with the United Arab Emirates – a foreign government that will give them a crazy amount of money,” said Warren. “The Senate shouldn’t pass a crypto bill this week to facilitate this kind of corruption.”
10 US senators have withdrawn support for the GENIUS Act over its lack of anti-money laundering and national security protection rules.
The Trump administration has previously expressed optimism that the GENIUS Act will scale all legislative hurdles. According to David Sacks, the bill was tipped for final assent in May, but enthusiasm has waned.
The U-turns made by senators like Elizabeth Warren ahead of a vote for the GENIUS Act on the House floor have blindsided the Trump administration.
However, if the bill fails to pass through the vote, the hardest hit will be the Trump-backed WLFI. The WLFI is putting a pause on centralized exchange listing, with the firm reportedly waiting for regulatory clarity before proceeding.
The delay may hurt USD1’s chances in the head-to-head rivalry with Tether as it plays catch-up to industry first-movers.
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