- Representative Gerry Connolly alleges Trump has '100 conflicts of interest.'
- Democrats intensify criticism of president's crypto ventures.
- Key stablecoin bill is facing more opposition.
“It is open corruption.”
This is how US Representative Gerry Connolly characterised President Donald Trump’s deep ties to the crypto industry on Monday.
“The first 100 days of Donald Trump’s administration have been rife with conflicts of interest,” Connolly told DL News.
“Most notably around the Trump family’s creation of their own memecoins and the president’s special treatment of crypto industry players.”
“It is open corruption,” added Connolly, a Democratic congressman representing a northern Virginia district and the ranking member of the House Oversight Committee.
Rattling Washington
The Trump family’s rapidly expanding crypto empire is rattling Washington as the president blurs the line between his personal business interests and public policy.
The Trumps oversee a purported DeFi venture called World Liberty Financial and its stablecoin, the development of crypto exchange-traded funds, and two memecoins that are worth $2 billion, according to CoinGecko.
At the same time, the US Securities and Exchange Commission under its new Trump appointee has ended the Biden administration’s crackdown on digital assets.
The agency has suspended or dropped numerous enforcement actions against the likes of Coinbase, Ripple, and Binance.
The administration has also signalled it will not pursue criminal cases in the crypto industry.
The topper was Trump’s offer to invite the top 220 holders of his memecoin to a “gala dinner” on May 22, which sent the token’s price soaring over 50%.
The White House refuted the allegations.
“President Trump’s assets are in a trust managed by his children. There are no conflicts of interest,” Anna Kelly, the deputy press secretary, told DL News.
100 conflicts
On April 30, Connolly and 20 other Democrats on the House Oversight Committee listed 100 conflicts of interest in the Trump administration. About a fifth of the allegations stemmed from crypto.
The congress members said the SEC‘s decision to drop a lawsuit against Coinbase after the company contributed $1 million to Trump’s inauguration fund was a conflict of interest. Coinbase declined to comment on the statement.
‘This is my president, but I am willing to say that this gives me pause.’
— Senator Cynthia Lummis
The lawmakers also said the SEC’s move to suspend a fraud investigation into Justin Sun, the crypto billionaire who invested $75 million in World Liberty Financial, was also a conflict of interest.
Sun had said the case lacked merit and tried to get the case dismissed. He did not immediately respond to a DL News request for comment.
Lutnick’s roles
The congress members also took aim at Secretary of Commerce Howard Lutnick. Pointing out that Lutnick, as the former CEO of Cantor Fitzgerald, did business with Tether, the statement said his role was a conflict of interest.
“A Trump executive order made the Commerce Secretary, or his designee, a member of a working group on digital asset markets, which impacts policies relevant to Tether and Cantor Fitzgerald,” the statement said.
Neither Cantor Fitzgerald, the Department of Commerce, or Tether responded to a request for comment.
The unprecedented nature of Trump’s business interests in crypto has also drawn concern from Republicans.
“This is my president that we’re talking about, but I am willing to say that this gives me pause,” Senator Cynthia Lummis, a Republican of Wyoming and long-time Bitcoin advocate, told NBC News in April.
Game changer
Moreover, it appears that Trump’s push into crypto may be slowing down legislation that the industry strongly desires.
A Senate bill dubbed the Genius Act, has the potential to be a game changer for the US stablecoin industry by establishing a regulatory framework. A similar bill is moving through the House.
Banks and payment processing firms are poised to jump into the market as soon as a bill is passed. Yet Trump’s ventures are emboldening Democratic senators to give the Genius Act a thumbs down.
Senator Chuck Schumer, the minority leader, said last week that senators should hold off on supporting the Genius Act.
And on Saturday, Senator Ruben Gallego and three other senators who had voted for the Genius Act to advance out of committee, suddenly hit the pause button.
Joining five other Democratic senators, they did not cite Trump’s crypto ventures in their objections. Yet they did say the bill failed to address money laundering and protect the financial system.
$2 billion deal
On May 1, a World Liberty Financial co-founder raised the stakes by disclosing that MGX, an investment fund backed by the United Arab Emirates, had used the platform’s stablecoin, USD1, to execute a $2 billion deal.
The transaction is expected to produce hundreds of millions of dollars in fees for World Liberty Financial, according to The New York Times.
Senator Elizabeth Warren called the deal “shady,” in a post on X on May 4.
‘It’s maybe the most corrupt act in the history of the White House.’
— Senator Chris Murphy
“The Senate shouldn’t pass a crypto bill this week to facilitate this kind of corruption,” said Warren, a Democrat from Massachusetts, who is the ranking member on the Senate Banking Committee.
Warren has called on ethics officials to investigate the Trump administration’s potential conflicts of interest.
On April 30, Senator Chris Murphy, a Democrat from Connecticut, lambasted Trump’s memecoin.
“It’s maybe the most corrupt act in the history of the White House,” Murphy said from the floor of the Senate.
“This is just a backdoor way for anyone with business before the Trump administration to send him millions of dollars in total secret.”
Liam Kelly is a DeFi Correspondent at DL News. Got a tip? Email at liam@dlnews.com.
