Launchy Regulatory Roundup #36 - GENIUS Act Blocked Over Trump Crypto Ties

SEC Considers Easing Security Token Issuance | Senators Probe Trump-Binance Ties

Marco Manoppo & Muhammad Reynaldi Ariananda Arkiang
May 11, 2025

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Good Morning.

Welcome to our 36th edition of the regulatory roundup. If you know anybody who would benefit from this content, please help us spread the word!

The US crypto regulatory landscape is hitting a political breaking point. What began as a bipartisan push for stablecoin clarity is now tangled in personal interests, power plays, and partisan distrust. As global competitors move ahead with clearer frameworks, America’s crypto future risks becoming a casualty of its own internal dysfunction.

In Today's Edition:

Headline: GENIUS Act Blocked Over Trump Crypto Ties 🛑
Global Legal Roundup: SEC Considers Easing Security Token Issuance 🤔
Case Study: Senators Probe Trump-Binance Ties 🔎

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HEADLINE

GENIUS Act Blocked as Democrats Cite Trump Crypto Ties

MSN - US Senate Minority Leader Chuck Schumer (D-NY)

State of play: The GENIUS Act, a bipartisan stablecoin regulation bill aimed at establishing clear rules for payment-based stablecoins in the US, failed to pass a key procedural vote (cloture) in the Senate on May 8.

Despite support from both parties and amendments that added stricter AML provisions, Senate Democrats withdrew their backing.
The democrats highlight concerns tied to President Donald Trump’s crypto ventures, including a controversial VIP dinner for memecoin holders.
The bill’s failure sparked criticism from Republicans like Sen. Cynthia Lummis and John Thune, who accused Democrats of stalling bipartisan progress.
Meanwhile, Democratic leaders such as Rep. Maxine Waters walked out of crypto-related hearings, calling for greater scrutiny of Trump’s crypto dealings.

Meanwhile, Treasury Secretary Scott Bessent had earlier expressed support for the GENIUS Act and broader digital asset legislation.

He emphasized the importance of market structure and stablecoin rules, aligning with Trump’s stated goal of making the US the “crypto capital of the world.”

What’s Next: With rising political tensions and partisan divides, the future of US crypto legislation remains uncertain, despite growing consensus on the need for regulatory clarity.

Why it Matters: The bill’s failure shows how Trump’s crypto ties are derailing bipartisan progress.

Our Take: GENIUS had real potential, but politics got in the way. Until lawmakers separate policy from personality, US crypto regulation will stay stuck.

GLOBAL LEGAL ROUNDUP

America:

🇺🇲 US regulator moves to drop appeal against Kalshi.
🇺🇲 CZ asked Trump to pardon money laundering conviction.
🇺🇲 SEC considers new rules easing security token issuance.
🇺🇲 US banks can handle customer crypto assets held in custody.
🇺🇲 Arizona governor signs law for state to keep unclaimed crypto.
🇺🇲 FT suggests advance knowledge of Melania Trump memecoin launch.
🇺🇲 Missouri bill ending capital gains tax heads to governor for signature.

Europe:

🇬🇧 UK to become ‘safe harbor’ for crypto with new draft rules.
🇮🇪 Conor McGregor touts Irish Bitcoin reserve in presidential bid.
🇩🇪 Germany seizes $38M in crypto from Bybit hack-linked eXch exchange.

APAC:

Indonesia suspends World over suspicious activity.
🇹🇼 Taiwan lawmaker calls for Bitcoin reserve at national conference.
🇧🇹 Bhutan launches tourism crypto payments with Binance Pay and DK Bank.
🇰🇷 South Korea presidential front-runner pledges to approve Bitcoin ETFs.

CASE STUDY

Senators Probe Trump-Binance Ties

IMG: Bitcoin.com

State of play: A group of Democratic senators has urged the DOJ and Treasury to investigate potential conflicts of interest stemming from President Trump’s ties to Binance and the broader crypto industry.

The request follows reports of Trump's family-linked venture, WLFI, facilitating a $2B Binance investment via its USD1 stablecoin,
The Democratic senators are also concerned that Trump may be profiting from crypto while influencing regulation.
Adding to the controversy, Trump was reportedly tricked by a Ripple-linked lobbyist into endorsing XRP for a US crypto reserve plan, sparking internal backlash.
These developments have raised alarms about regulatory capture and the use of executive power for personal crypto gain.
Reports say that up to 40% of Trump’s net worth is now crypto-linked.
The DOJ has also been asked to revisit Binance’s 2023 plea deal and former CEO CZ Zhao’s reported pardon request.

Our Take: Real oversight, not political favoritism, is what the space needs to thrive.

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NOTEWORTHY READS & MEME

Greg Xethalis’s thread on the Winklevoss Standard.
Sen. Bill Hagerty’s thread on the GENIUS Act development.
Salah Ghazzal’s thread on the benefits of stablecoins and the GENIUS Act.

meanwhile, at the US Treasury
— Tom Schmidt ＞|＜ (@tomhschmidt)
3:08 PM • May 9, 2025

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