Senate: Oppose Trump Crypto Grift Enabling Bill
The Honorable Members of the Senate Committee on Agriculture, Nutrition and Forestry
The Honorable Members of the Senate Committee on Banking, Housing and Urban Affairs
Washington, D.C. 20510
Dear Senators:
On behalf of more than one million members and supporters of Public Citizen, we urge the members of the Senate Committees on Banking and Agriculture to oppose the Digital Asset Market Clarity Act as currently drafted.
We recognize the efforts underway to develop a regulatory framework for digital assets. However, any such legislation must be grounded in important principles that many senators support, such as consumer protection, financial stability, and market integrity principles. These include: preserving state oversight and enforcement authority; preventing the “tokenization” of traditional securities in ways that evade registration and disclosure requirements; preventing illicit finance and abuse of the financial system; and ensuring that federal policy does not enable conflicts of interest, corruption, or self-dealing.
We further believe that any crypto legislation must close loopholes that would effectively allow stablecoins to pay interest or rewards, undermining existing banking and securities regulations.
Without these protections, the Digital Asset Market Clarity Act risks weakening regulatory safeguards, exposing consumers and investors to harm, and entrenching regulatory arbitrage rather than promoting responsible innovation. We therefore urge the Committees to reject this legislation.
Preemption: The bill fails to protect state oversight of cryptocurrency. (VIII Sec. 802) We urge Congress to ensure that any bill includes a provision specifying that the legislation does not preempt state consumer protection laws. States have long been charged with primary responsibility for protecting their citizens from fraud and misconduct. Today, every state maintains securities laws that operate in tandem with federal law to protect consumers from fraud and other unfair practices in connection with the offer, purchase, or sale of securities. This dual system of federal and state regulation has protected investors for nearly a century. Such a provision (savings clause) will allow investors to enjoy the full protection of both state and federal law. We attach a letter signed by organizations calling for strong protection for state oversight authority.
Tokenization: For decades, bad actors have attempted to raise capital from the public while evading federal registration and disclosure requirements designed to protect investors. The bill’s imprecise language fails to clearly distinguish cryptocurrency assets from traditional securities representing ownership in established enterprises. For conventional operating firms, the bill allows parallel derivatives that can transact outside securities registration and disclosure. This could pave the way for more fraud. Beyond the principles this bill fails to honor, proposed legislation dangerously expands and interlocks banking into cryptocurrency as well as traditional commerce. American law has long separated banking from commerce. Lenders should not seek the default of their borrowers in hopes of taking over the business. This bill would allow banks to use cryptocurrency to buy oil, real estate and other real property.(V Sec. 505 h(2)) It effectively overrides the Volcker Rule prohibition on bank proprietary trading. So far, cryptocurrency’s frequent price volatilities, bankruptcies and criminal fraud cases did not unsettle the broader financial markets. This bill would channel cryptocurrency tremors directly into the mainstream banking sector.
Interest/Rewards and Illicit Finance: The GENIUS Act claimed to bar stablecoin issuers from paying interest. (The law also correctly states that stablecoins do not enjoy FDIC insurance.) But stablecoins are nevertheless paying de-facto interest via exchanges. The current draft appears to eliminate some rewards but falls short in curtailing circumvention for a sector with a record of rules-evasion. (IV Sec. 404) We attach commentary about how cryptocurrency and stablecoins enable illicit finance. Payment of interest/rewards through exchanges for stablecoin transactions further enables illicit arms, drugs, and human trafficking. The bill also provides inadequate enforcement of anti-money laundering laws.
Presidential corruption: Trump’s cryptocurrency enterprises represent the greatest corruption in presidential history, as the attached letter signed by the nation’s leading ethics experts affirm. The current bill fails to terminate or even curtail this massive grift.
We respect that cryptocurrency requires strong consumer, investor and systemic prudential regulation. But this bill will only further expand the opportunities for abuse, fraud and systemic peril.
Again, we appreciate the hours of negotiations, and the attention of many senate offices to our concerns. We do object to a mark-up scheduled for a mere two days following release of a draft (Tuesday, Jan. 13, 2 AM); and we support the call by Sens. Jack Reed, Chris Van Hollen, and Tina Smith for a hearing on the bill ahead of any committee vote.
For questions, please contact Martha Perez Pedemonti (at mperezpedemonti@citizen.org) and/or Bartlett Naylor (at bnaylor@citizen.org).
Sincerely,
Public Citizen
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December 10, 2025
Honorable John Thune Honorable Mike Johnson
Majority Leader Majority Leader
US Senate U.S. House of Representatives
Washington, DC 20510 Washington D.C. 20510
Honorable Chuck Schumer Honorable Hakeem Jeffries
Minority Leader Minority Leader
US Senate U.S. House of Representatives
Washington, DC 20510 Washington, DC 20510
RE: Preserve Critical State-Level Investor-Protection Resources in Digital Asset Market Structure Legislation
We, the undersigned organizations, write to express our concerns with recent federal legislative proposals to establish a new market structure for digital assets, including electronic trading and complex derivatives involving cryptocurrency, that would fail to preserve existing state laws and the means for consumers to enforce them. We urge Congress to ensure the continued viability of state laws and regulations in any federal market structure legislation by making it clear in the legislative text that the bill does not preempt state law and does not hamper the ability of states to adopt stronger protections for investors and consumers.
In our federalist system, states have long been charged with primary responsibility for protecting their citizens from wrongdoing such as fraud and misconduct. In recent years, state regulators, utilizing state law, have brought dozens of enforcement actions against bad actors in the digital asset industry, helping to ensure that harmed consumers are adequately remedied and protecting against future wrongdoing by putting bad actors on notice that illegal practices will be prosecuted.
Today, every state has securities laws that work in tandem with federal law to protect consumers from fraud and other unfair practices in connection with the offer, purchase, or sale of securities. This dual system of federal and state regulation has protected investors for nearly a century. Investors and consumers of cryptocurrency warrant this same level of dual protection.
Past legislative proposals concerning digital asset regulation, such as the CLARITY Act and FIT 21, would create federal frameworks for the digital asset and digital commodity industries. Those proposals, however, did not contain provisions to ensure that state laws and regulations in this area are not deemed preempted by the federal legislation. The absence of explicit language in the legislative text does not eliminate concerns regarding federal preemption. To provide this assurance, future bills should include a provision specifying that state consumer protection laws are not preempted by the legislation. Such a provision will allow investors to receive the full protection of both state and federal law.
In a rapidly evolving industry, such as the digital asset industry, the best protection for investors and the marketplace is for state and federal laws to work simultaneously. We urge Congress to include a savings clause for critical state consumer protection laws in any future legislation seeking to create a federal framework for digital assets.
Sincerely,
Advocates for Basic Legal Equality, Inc.
American Association for Justice
Americans for Financial Reform
California Advocates for Nursing Home Reform (CANHR)
Center for Justice & Democracy
Demand Progress
Friends of the Earth US
JustLeadershipUSA
National Association of Consumer Advocates
National Consumer Law Center, on behalf of its low-income clients
Next 100 Coalition
Oregon Consumer Justice
Oregon Consumer League
Our Revolution
People’s Action Institute
Public Citizen
Public Good Law Center
Public Justice
Texas Watch
The Academy of Financial Education
The Value Alliance
UltraViolet Action
Virginia Citizens Consumer Council
cc: United States Senate Committee on Banking Housing and Urban Affairs;
United States Senate Committee on Agriculture, Nutrition, and Forestry
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Letter from Ethics Leaders on Trump’s Cryptocurrency Corruption
Dear Member of Congress
We, the undersigned organizations and individuals committed to honest government, believe President Donald J. Trump’s sprawling personal cryptocurrency ventures may constitute flagrant violations of anti-conflict statutes. As such, we urge you to accord special scrutiny as you consider legislation involving cryptocurrency. Voting to approve these bills will serve to ratify what may be perhaps the most conspicuous corruption in presidential history.
Trump once dismissed bitcoin, the most popular cryptocurrency, as “based on thin air.” It is a “scam.” It can facilitate unlawful behavior, including drug trade and other illegal activity.” Now, he’s the self-proclaimed cryptocurrency president.
This year, the Trump family announced an agreement with a fund backed by Abu Dhabi that “would be making a $2 billion business deal using the Trump firm’s digital coins,” according to the New York Times. The Constitution (Article 1, Section 9) forbids accepting money (specifically a “present” or “emolument”) or anything of value from any “king, prince, or foreign state.”
Before this, Trump promised a presidential dinner to the largest new buyers of his cryptocurrency “meme,” called “Trump.” He restated this “gala” opportunity May 5. Federal law strictly regulates payments to government officials, including gifts. Although the president may receive gifts, he may not “solicit” gifts. These prohibitions begin with the Constitution’s Emoluments Clause and are reiterated in the anti-bribery statute, 18 U.S.C. § 201, and federal regulations, 5 C.F.R. § 2635. Although section 2635.205 lists several exemptions from the prohibition, none exempts soliciting purchases for personal gain.
As to why the public might be interested in sending money, the website explains: “This Trump Meme celebrates a leader who doesn’t back down, no matter the odds.” Under the Trump meme website’s question, “What is a meme?” the website explains: “Merriam-Webster’s meme noun: 1: an idea, behavior, style, or usage that spreads from person to person within a culture.”
The website states that “Trump Memes . . . are not intended to be, or to be the subject of, an investment opportunity, investment contract, or security of any type.” Trump’s Securities and Exchange Commission also stated that meme coins have “no use.” Other cryptocurrency observers deride memes generally as without value. Former aide Anthony Scaramucci said Trump’s effort demeans broader cryptocurrency efforts, calling it “Idi Amin level corruption.” Another commenter said that the Trump meme “is effectively a ‘for sale’ sign on the White House.” Some, including an author in the Washington Post, characterized this token as a “sh—coin.”
In short, it appears Trump is not soliciting money in exchange for an investment or tangible product (such as a Bible, sports shoes, or a guitar), but soliciting money in exchange for nothing—that is, asking for a gift that will benefit him personally.
Already, Trump has profited millions from the meme and other ventures. His initial sale generated nearly $100 million. The salvo in April brought in roughly $100 million more. Some new buyers come through the Binance exchange, once legally barred for US investors, meaning that Trump may well be violating the emoluments clause with this venture as well.
The dangers inherent in the Trump meme portend ominously. Should the president be allowed to enrich himself in this way, other politician might follow this path, rendering the prohibition on solicitation in 18 U.S.C. § 201 and the prohibitions on receipt of gifts by officials other than the president meaningless.
Paradoxically, while this Trump meme is worthless (by his own estimation) Trump managed to create an earlier cryptocurrency that is worth less. In October, 2024, he became the “chief cryptocurrency advocate” for World Liberty Financial, a nascent cryptocurrency firm. The World Liberty Trump cryptocurrency is worse because it cannot be resold. This Trump cryptocurrency buys only “governance,” but only a minority share. Trump controls the majority of the governance tokens.
Now, the Senate considers bills to deal with the market structure for cryptocurrency trading.
At the very least, Congress must bar the president along with all elected officials and their families from owning, buying or otherwise trafficking in cryptocurrency. Americans must be assured that policy won’t be fashioned by those profiting from the shape of the legislation.
Further, Congress should approve an amendment that restates conflict laws that already apply to the president. Namely, he may not solicit gifts; he may not accept gifts from a foreign sovereign; he may not sell political favors.
Sincerely,
Accountable.US/Accountable.NOW
Virginia Canter
Center for Biological Diversity
Consumer Federation of America
Ambassador Norman Eisen (RET), former White House Ethics Czar
End Citizens United
Free Speech for People
Prof. Richard W. Painter
Project on Government Oversight (POGO)
Public Citizen
State Democracy Defenders Action
Prof. James A. Thurber
20/20 Vision
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Stop the Next Epstein; Stop Stablecoin “Rewards”
Congress’ new cryptocurrency law transfers wealth from community banks and may open the door to the next Jeffrey Epstein.
By Bartlett Naylor
A loophole in a cryptocurrency law Congress approved last summer may help finance the next Jeffrey Epstein. This overlooked snafu may permit Interest payments on stablecoins., potentially financing sex traffickers, cartels and sanctioned regimes.
Stablecoins are cryptocurrency where one dollar buys one token. The new law claims interest payments on stablecoins are banned, making the product less attractive than a traditional, FDIC-insured bank account. But major stablecoin issuers are sidestepping the ban by offering “rewards” to purchasers — some of which exceed bank deposit rates.
This is not conjecture and where there is smoke there is fire. The Monster Jeffrey Epstein flirted with cryptocurrency to finance his human trafficking operation, as revealed by the trove of 20,000 documents released by the House Oversight Committee. He also lived near Howard Lutnick, who led Cantor Fitzgerald, as it held the underlying assets for the Tether stablecoin cryptocurrency, which is the largest. Where is Lutnick now? He is now Trump’s Commerce Secretary.
Epstein ultimately remained with traditional finance, using JP Morgan Chase as they failed to ask any questions
The next Epstein may, and the current human traffickers do, favor stablecoins.
Human traffickers already prefer stablecoins because they offer fast, cross-border, semi-anonymous transfers — perfect for hiding illicit proceeds.
The trend is unmistakable:
- The State Department’s 2021 Trafficking in Persons reportnoted that human trafficking networks increasingly use cryptocurrency to launder the proceeds of their crimes.
- The Wall Street Journal reported that Russian oligarch networks, Iranian financial networks, the terrorist group Hamas, the Maduro regime in Venezuela, and international drug cartels evaded sanctions by using stablecoins to conduct cross-border transactions that would be much more difficult, if not impossible, through conventional banking channels.
- The New York Times reported that at least $28 billion linked to criminal activity has flowed through cryptocurrency exchanges in just the last two years.
- Georgetown researchers reported that in 2024, illicit transactions with one form of cryptocurrency, namely stablecoins, passed $51 billion, up from $46 billion in 2023.
In crime generally, cryptocurrency makes for fast, cross-border, largely anonymous transactions. “At least $28 billion tied to illicit activity has flowed into cryptocurrency exchanges over the last two years,” the New York Times reported Nov. 17.
Worse, the loophole risks fueling criminal networks, including human traffickers who already use cryptocurrency, while drawing money away from consumers and the community banks that support local economies. Some of that money going into stablecoins is money not going into community banks, which can be recycled into home and small business loans. Treasury analysts warn that if stablecoins begin offering yields comparable to bank accounts, as much as $6.6 trillion—about 36% of all U.S. deposits—could move out of insured institutions and into payment stablecoins.
Honest consumers who simply want a good interest payment for their savings may unwittingly abet the crooks if they buy stablecoins. That’s because a money laundering operation requires legitimate money to hide. An honest dollar goes into the stablecoin fund and might come out to redeem a trafficker.
Congress will shortly consider another cryptocurrency bills. While Public Citizen opposes this bill on many grounds, it is critical that any final bill close this stablecoin “rewards” loophole. Community banking should thrive, not the next Epstein.