Just as the cryptocurrency industry eagerly awaited the launch of the first stablecoin regulatory framework in the United States, the Senate delivered a stunning reversal—on May 9, the (GENIUS Act) pushed by Trump was narrowly defeated by 48:49, with Democrats collectively hitting the pause button. This legislative drama, criticized by the Treasury Secretary as a "once-in-a-century opportunity lost," has torn open the veil of political interests intertwined with crypto capital, and has made the altcoin market smell the bloody scent of a new round of frenzy.
1. The Bill's Sudden Death: A Sacrifice of Regulation Under Political Scythes
This bill, aimed at delineating rules for the dollar stablecoin, was originally imbued with a grand narrative to consolidate the dollar's hegemony, but at the last moment became a sacrificial victim of partisan games. The Democrats collectively turned against it, citing "gaps in anti-money laundering provisions" and "lack of regulation for foreign companies," actually targeting Trump's family's crypto empire—specifically the USD1 stablecoin issued by World Liberty Financial, controlled by them, which is being used for the UAE's $2 billion investment in Binance, from which the Trump family stands to gain 75% of the profits. Ironically, the bill's requirement that stablecoins be 100% backed by dollars or U.S. Treasury bonds was criticized by Senator Hawley as "giving money to tech giants," on the grounds that companies like Amazon and Meta could issue stablecoins to manipulate the market.
This rift reached its peak in the settlement case between Ripple and the SEC. After four years of tug-of-war, Ripple ultimately settled for a $50 million fine to conclude a $125 million charge, with its CEO publicly announcing a $2 billion acquisition plan, attempting to shift the focus of public opinion from "$15 billion in user losses" to "compliance victory." But the Democrats, with their sharp eyes, noted that Trump-appointed "Crypto Czar" David Sacks had publicly endorsed XRP, while Ripple's $70 million donation to the Republican super PAC stands as ironclad evidence of interest transfer.
2. The Twilight of the Crypto Empire: The Wealth Noose of the Trump Family
When Trump declared, "We will make America the global crypto capital," his family had already quietly woven a $2.9 billion crypto network. From the USD1 stablecoin in collaboration with the Abu Dhabi government, to a $1.5 million ticket for the "Crypto and AI Innovators' Dinner," to the $TRUMP meme coin with a market cap exceeding $2.1 billion, Trump's crypto assets account for nearly 40% of his net worth, even surpassing his investments in the golf industry. This frantic wealth accumulation has prompted a collective backlash from Senate Democrats: Senator Blumenthal sent an inquiry letter to World Liberty demanding disclosure of communications with the Trump family; Merkley proposed the (Ending Crypto Corruption Act), which directly prohibits officials and their families from participating in cryptocurrencies, with violators facing fines of up to $1 million and forfeiture of profits.
An even more fatal blow came from within—the 10 Democratic senators who had previously supported the bill turned against it, including the bill's original co-sponsor Gillibrand. Their betrayal stemmed from Trump's blatant pricing of political influence: holders of the $TRUMP token could bid for a private dinner with the president, and the first 25 could receive a guided tour of the White House, bringing Trump $320 million just in transaction fees. This "political NFT-ization" thoroughly enraged the Democrats, who warned that it would "open the Pandora's box of foreign interference in American politics."
3. Countdown to Altcoin Season: Capital Frenzy in a Regulatory Vacuum
The bill's collapse sent ripples through the crypto market. The leading stablecoin USDT saw its price fluctuate by over 5% for a brief period, while the altcoin market surged—"Trump concept stocks" like Solana and Cardano defied the trend and rose, and DeFi protocol trading volumes surged by 300%. This bizarre phenomenon stems from the market's speculation in a regulatory vacuum: since stablecoin rules are undecided, capital floods into the more ambiguously regulated altcoin space, attempting to replicate the "Dogecoin myth" of 2021.
But behind the revelry lies a deadly trap. Tether, as the world's largest stablecoin, already gives regulators headaches due to its foreign investment background and significant holdings of U.S. Treasury bonds, and the (GENIUS Act)'s regulatory oversights have sparked a strong warning from New York Attorney General James: "If regulation is not strengthened, Tether may become a breeding ground for money laundering and terrorist financing." Even more dangerously, after the Trump administration disbanded the SEC's crypto investigation team, the market has fallen into a state of "regulatory anarchy," with scammers using "Trump endorsement" as a pretext to sell fraudulent ICO projects on platforms like Telegram, with daily fraud amounts exceeding tens of millions of dollars.
4. The Regulatory Dilemma: The Ultimate Showdown of Dollar Hegemony and Capital Interests
The essence of this legislative drama is the ultimate showdown between dollar hegemony and crypto capital. The Democrats advocate for "regulating first and developing later," demanding that stablecoins be included in the Federal Reserve's regulatory framework to ensure the dollar's dominant position; the Republicans lean towards "innovation first," believing that excessive regulation would stifle America's competitiveness in the Web3 space. This divide is magnified infinitely in the face of Trump's family's crypto empire—when the personal wealth of political figures is deeply tied to crypto assets, regulatory policies cease to be a simple public choice and become a tool of interest group games.
The far-reaching impact lies in the fact that the bill's failure could reshape the global crypto landscape. The EU's MiCA bill has entered the implementation phase, while countries like the UAE and Singapore are accelerating the introduction of crypto-friendly policies, and the regulatory vacuum in the U.S. may lead to capital outflows. Coinbase CEO Armstrong's warning is deafening: "If legislation is not passed before August, America will miss the opportunity to become the global crypto leader." But from the Democrats' perspective, preventing "Trump-style corruption" is more urgent than competing for industry discourse—after all, when a president's crypto assets resonate with policy-making, any regulatory framework could become a scythe for harvesting the public.
This struggle between politics and capital is far from over. As the Senate fell into deadlock, the altcoin market's revelry was just beginning. The future of the crypto industry may well be hidden within the Trump family's $2.9 billion in crypto assets, lurking in the furious inquiries from Democratic lawmakers, and even more so in the mobile screens of every speculator attempting to strike gold in the regulatory vacuum. In this war without gunpowder, there are no winners, only survivors.
