On the Senate floor, Sen. Elizabeth Warren (D-MA) accused President Trump of using crypto to enact the biggest corruption scandal in modern U.S. history.
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00:00Equally divided.
00:03Mr. President.
00:04Senator from Massachusetts.
00:06Mr. President, I rise today to talk about the Genius Act
00:09and the urgent need to strengthen this bill before the Senate votes on it later this week.
00:14The Genius Act would create a framework for bringing stable coins deeper into the U.S. financial system.
00:22And for those who are unfamiliar with stable coins,
00:24they're a type of cryptocurrency whose value is pegged to the value of another asset, like the U.S. dollar.
00:33A stable coin is similar to a bank deposit, only without the guarantees of a bank behind it.
00:39A stable coin is supposed to maintain a stable value,
00:43so a holder can redeem it to get their cash back on demand,
00:47and they can make payments with it, at least in theory.
00:51Now, Democrats want to work with Republicans to advance a stable coin bill
00:56that will make stable coins safer to use and curb the worst abuses of the industry.
01:03There are five areas that need revision.
01:07First, a bill must include basic rules so government officials can't use stable coin ventures
01:14to line their own pockets, and so that foreign governments and giant corporations
01:19cannot use stable coins to pay bribes to the President of the United States.
01:25Second, the bill must prevent big tech and other commercial firms from issuing stable coins,
01:32thereby preserving America's historical separation between banking and commerce.
01:38Third, the bill must include basic consumer protections, the same as for any other financial transaction.
01:45Fourth, the bill must safeguard national security,
01:49providing the same guardrails as other payment systems
01:52to make sure that we are not turbocharging the financing of drug traffickers, terrorists,
01:59adversaries like North Korea, and crypto scammers.
02:03And fifth, the bill must have sufficient safeguards so that a stable coin meltdown
02:10won't trigger an economy-wide financial meltdown.
02:14With adequate changes in those five areas, Democrats can support the Genius Act.
02:21When the Genius Act was before the Banking Committee in March,
02:25Senate Democrats worked hard to improve the bill.
02:28Together, Democrats introduced nearly 70 amendments.
02:32We call for votes on more than two dozens of them.
02:36Every single Democrat voted for every single amendment,
02:41and every single Republican voted no.
02:44When the bill advanced out of the committee, Democrats made clear
02:48they needed to see real changes in the bill
02:51before they could vote for it down here on the floor of the Senate.
02:55The version that will be voted on by the full Senate as early as this Thursday
03:00makes only minor changes, leaving fundamental problems with the bill.
03:06I know that the Republican majority intends to force this vote with no real changes.
03:11That would be a mistake.
03:13If the majority wants to establish a durable legal framework for digital assets,
03:19rather than just try to score political points,
03:21they will take these concerns seriously and agree to improve the bill.
03:26Since the committee vote, President Trump's aggressive efforts to profit from stable coins
03:34and the obvious opportunities for bribery and other influence peddling
03:39have demonstrated why it is vital that we make meaningful, substantive reforms to the bill.
03:46So let's talk for just a minute about how we got here.
03:50During his first term, Donald Trump was extremely critical of crypto,
03:54describing crypto as, quote, highly volatile and based on thin air, thin air,
04:02and highlighting that it can, quote, facilitate unlawful behavior,
04:07including drug trade and other illegal activity.
04:12When he ran for office in 2024, however,
04:15the crypto industry poured enormous sums of money into Donald Trump's election,
04:20and after he was elected, crypto leaders contributed another $18 million to his inauguration.
04:30It was no surprise when Trump reversed his position and began to boost the industry.
04:35But it has been shocking to see Donald Trump move at breakneck speed
04:40to use his position as president to reap billions of dollars for himself personally and for his family.
04:49The biggest corruption scandal in modern history is unfolding right now,
04:56and no one in here is paying attention to it.
04:59Trump has created the opportunity to trade presidential favors like tariff exemptions,
05:06pardons, and government appointments for crypto purchases
05:11that will directly benefit himself and his family.
05:15And no one needs to speculate on what might happen.
05:20All of this is happening in full view of the public.
05:24Over his first 100 days, the president has enabled corruption on such an unprecedented scale,
05:31it would truly make a two-bit dictator blush.
05:36Most people are aware that the meme coin Trump launched ahead of his inauguration
05:41was sagging in value recently.
05:43So his recent announcement that he would host a dinner for the top 220 investors in the coin
05:53and would provide a, quote, exclusive bonus VIP White House tour for the top 25 investors
06:02suddenly boosted Trump's crypto venture.
06:06Trump has already made more than $300 million from trading fees alone
06:12and billions more in unrealized gains since he owns 80% of those coins.
06:19And this is not his only crypto grift.
06:23Two weeks after the banking committee voted on the Genius Act in March,
06:27President Trump's crypto company, World Liberty Financial, launched its own stable coin called USD1.
06:38Don Jr. is promoting it as, quote,
06:42just as safe as a bank account, but with all that extra nonsense.
06:46USD1 was quietly launched less than a week ago, and its market capitalization now exceeds $2 billion.
06:58It is already the seventh largest stable coin in the entire world.
07:04As the New York Times reported last week in a front-page story about Trump's crypto corruption,
07:09quote, World Liberty Financial has eviscerated the boundary between private enterprise and government policy
07:17in ways without precedent in modern American history.
07:22And here's the most egregious example.
07:25Trump's stable coin was issued on the network of Binance, the largest crypto exchange in the world.
07:33Binance is an interesting choice to be Trump's partner in the stable coin business.
07:38Back in 2023, Binance pleaded guilty to criminal charges after allowing, quote,
07:46money to flow to terrorists, cybercriminals, and child abusers through its platform.
07:53Its CEO went to jail after also pleading guilty to criminal money laundering charges.
08:01He is reportedly lobbying Trump for a pardon.
08:05What better way to buy off Donald Trump than to offer him a very favorable business deal in the stable coin business?
08:15The opportunity for corruption is not hypothetical.
08:19Trump has already given us a staggering example.
08:23Last week, it was reported that an Abu Dhabi investment firm, MGX,
08:29is using Trump's USD1 stable coin to finance a $2 billion investment in Binance,
08:38essentially giving Trump a cut of the deal.
08:42The firm is chaired by the so-called spy sheik of the United Arab Emirates
08:48and co-owned by G42, a firm with extensive ties to the Chinese government.
08:56The Trump organization recently announced plans to build a hotel in an apartment building in the UAE,
09:02and buyers, you guessed it, will be allowed to make payments in bitcoins.
09:08The Genius Act makes this kind of corruption worse.
09:13There is nothing in the bill to stop it.
09:16Instead, the bill would accelerate it.
09:20President Trump and the crypto industry are not trying to jam through this bill
09:25because they know it will make corruption and bribery harder.
09:29They are trying to jam it through because they know it will turbocharge
09:33the size and scale of the stable coin market
09:37and help boost the value of their own stable coin ventures,
09:42all while containing no real restrictions on the president's self-dealing.
09:49Under the current version of the bill,
09:51President Trump is able to rake in transaction fees
09:55every time a stable coin is used or traded,
09:59every time his stable coin is used or traded.
10:02When trading is active, those fees are measured in the hundreds of millions of dollars.
10:10Trump will also make money a second way.
10:13Everyone who owns USD1 essentially provides Trump with an interest-free loan.
10:20This means that Trump will make money on assets backing the stable coin,
10:25and he will pay no interest to the holders of the coin.
10:28Big corporations and foreign governments can run the MGX play
10:34and use USD1 to cut Trump in on business deals
10:41or openly pay him off for tariff exemptions and other special deals,
10:48pardons, or government appointments.
10:51For a giant corporation hoping to see a prosecution dropped or a license granted,
10:57Trump's new stable coin business creates a way to offer a payoff
11:04for the president of the United States to use his influence to get the desired outcome.
11:11These massive opportunities for grift must be stopped,
11:16and Democrats have common-sense amendments to do exactly that.
11:20For example, we propose that the president and all other elected officials and their families
11:28be barred from owning, controlling, promoting, or otherwise participating in stable coin business ventures.
11:36While I believe that all elected officials should be barred from buying, selling, and trading stock,
11:42investments in stable coin companies themselves create a special risk right now.
11:48Congress is currently writing laws that will sharply increase or decrease the value of these businesses.
11:57The public should know that no one is making decisions to further their own financial interests.
12:04The current version of the Genius Act contains no such restrictions.
12:09The Senate should not pass a bill that facilitates Trump's breathtaking corruption and lines his pockets
12:19and welcomes other elected officials to do the same.
12:23There are other fundamental problems with the Genius Act that need to be fixed before we vote.
12:30It is crucial to prohibit the intermingling of commercial businesses and stable coins.
12:36For centuries, our country has maintained a separation between our system of money and payments on the one side
12:45and actual businesses in the real economy on the other side.
12:50That separation helps protect the stability of our financial system,
12:55helps promote fair competition in the economy,
12:58and prevents concentrating too much economic power in the hands of just a few.
13:06Democrats and Republicans have, time and again, linked arms to defend exactly this separation.
13:14For example, when Mark Zuckerberg tried to leverage Facebook to create a stable coin in 2019,
13:21both Democrats and Republicans said no.
13:26Run Facebook or run a stable coin operation, but do not mix the two together.
13:33Under the Genius Act, however, Zuckerberg could launch his own coin as soon as the bill is passed.
13:40This is particularly of interest to Elon Musk.
13:45He has already explained his plan to expand his social media platform, X, into a payment platform, XMoney.
13:55He has said that he can use the reach of X so that in a few years, XMoney and his stable coin will be, quote,
14:05half the global financial system.
14:08The man has vision.
14:09He and other big tech billionaires would be free to issue their own currencies to compete with the U.S. dollar.
14:19There is absolutely no reason to allow this.
14:25Other bipartisan stable coin bills have not permitted this.
14:30Blessing co-president Elon Musk's ambitions to overtake the U.S. money supply
14:37is completely unnecessary to build a well-regulated and safe stable coin regime.
14:46Democrats have an amendment to prohibit the intermingling between non-financial companies and stable coin issuers.
14:54And we should make that change before we vote on the Genius Act here in the Senate.
15:01It is also important to strengthen the Genius Act to safeguard our national security.
15:09Stable coins now account for more than 60 percent of crypto transactions,
15:16according to a recent public analysis from the blockchain analytics firm Chainalysis,
15:21making them, quote,
15:23the new kingpin of illicit crypto activity.
15:28The current version of the bill does little to prevent stable coins from being exploited by terrorists,
15:36cartels, and criminals.
15:38In fact, compared to the version voted out of the banking committee,
15:42the current bill creates new loopholes to allow operators of so-called decentralized crypto exchanges
15:52and other services to continue circulating for non-compliant stable coin issuers.
16:00It is critical for service providers like crypto exchanges and custodians
16:06to maintain programs to check for illegal financial activity
16:11and for our government to be able to sanction mixers that move millions of dollars for our adversaries.
16:19It is important also that terrorists and drug traffickers know
16:24that they cannot escape sanction enforcement by switching from dollars to stable coins.
16:32And it is critical that stable coin issuers be required to monitor the blockchains
16:37on which stable coins are traded.
16:40As drafted, the Genius Act does not include those safeguards.
16:46Democrats have language to fix that.
16:49We need also to ensure that the same basic consumer protections
16:54that apply when somebody pays their rent using their checking account
16:59or buys a cup of coffee with a credit card also apply to stable coins.
17:04For example, at a bare minimum, consumers should have easy access to their money
17:10if they want to redeem their stable coins.
17:12However, the Genius Act does not do that, leaving consumers exposed to potential delays,
17:19to process hurdles, and to junk fees.
17:22When it comes to consumer protection, the most recent version of the bill actually got worse
17:28compared to the version that was voted on in committee.
17:32The current Genius Act strips out certain protections, leaving consumers exposed to fly-by-night scammy wallet providers
17:43to hold their stable coins.
17:45And, get this, all but the very largest stable coin issuers get to evade auditing requirements,
17:53leaving consumers vulnerable to the type of financial fraud that is now rampant in the crypto ecosystem.
18:03Notably, the Consumer Financial Protection Bureau is not mentioned once in the bill,
18:10despite the CFPB being responsible for enforcing our nation's federal consumer financial laws.
18:16As Fed Chair Jerome Powell said in a Senate hearing shortly after Doge attempted to shut down the CFPB,
18:25when CFPB is not on the job enforcing consumer protection laws,
18:30there is no one in the federal government to pick up the slack.
18:35No cop on the beat.
18:37And that's exactly what the supporters of the Genius Act are hoping for.
18:42No one in the federal government who has the expertise or the budget to be a real cop on the beat.
18:49The stable coin scammers will target every person in America,
18:54and under the Genius Act, they will run almost no risk of getting caught.
19:00The current version of the Genius Act leaves consumers exposed to scams, fraud, and abuse.
19:07We can plug those holes and make sure that consumers are protected
19:11when making electronic payments, regardless of the technology that underpins the transaction.
19:18And Democrats have amendments for that.
19:22Finally, the Genius Act lacks the basic safeguards necessary to ensure
19:27that stable coins don't blow up our entire financial system.
19:33This isn't a hypothetical risk.
19:36Circle's stable coin dipped from $1 to $0.88 in March of 2023, two years ago,
19:46threatening a broader run on the crypto market.
19:51But regulators bailed out Circle's and other big corporations' deposits
19:56at Silicon Valley Bank in order to prevent a banking crash.
20:02Money market funds and the repo market, which pose similar risks as stable coins,
20:08have been bailed out twice in less than 20 years.
20:13The threats that stable coins pose to our economic system are real.
20:19And, once again, taxpayers will be called on to bail out millionaires and billionaires,
20:27only this time it will be the millionaires and billionaires that are fronting for crypto currencies.
20:35The bill as drafted permits stable coin issuers to invest in riskier assets,
20:42including uninsured U.S. and foreign bank deposits and repo loans and hedge funds,
20:48and allows them to engage in risky non-stable coin activities,
20:53like private credit or derivatives trading.
20:56At the same time, the bill constrains regulators' ability to apply capital and liquidity safeguards
21:03to limit the chances of stable coins' failures.
21:07It restricts regulators' ability to enforce the already weak requirements of the bill
21:12when a stable coin issuer violates them,
21:16and it stacks the deck against denying stable coin applications submitted by risky companies.
21:24In addition, regulators would have no authority to block worrisome mergers and acquisitions,
21:33even if the new stable coin owners have a history of financial fraud or money laundering.
21:40Let's just give an example here.
21:42Sam Bankman Freed decides he wants to buy a stable coin company while he is still in prison.
21:49Genius Act says go right ahead.
21:53Democrats have solutions to fix these financial stability weaknesses,
21:58and we should include them in the bill now.
22:01If the Genius Act goes forward without these changes,
22:05Donald Trump will continue to line his pockets with crypto scams,
22:10while his policies continue to tank the economy for everyone else.
22:15Efforts to personally pay off government officials like the President of the United States
22:21will accelerate, and they're going to happen right out in the open.
22:27Big tech billionaires will have even greater control over our economy.
22:33Terrorism financing and sanctions evasions risks will grow.
22:38Consumers will be at greater risk of getting cheated,
22:42and another financial crash will be more likely.
22:46The problems with this bill are serious.
22:50But here's the thing.
22:51They can be solved.
22:54Democrats have offered solutions throughout this process,
22:57and it is not too late.
22:59We can find common ground on a reasonable framework
23:03to regulate the stable coin market
23:06and to put those changes into the bill now.
23:09But we cannot bless Trump's corruption
23:13and put consumers, our financial system,
23:17and our national security at risk.
23:22Mr. President, I yield the floor.