Crypto reckons with Trump's growing industry ties

Politico

6 days ago

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QUICK FIX
Washington's most powerful cryptocurrency champion is starting to become a major headache for the industry.
More than four months after he took back the Oval Office, President Donald Trump's deepening business ties in the $3.5 trillion market are predictably drawing outrage from progressive advocacy groups, Democratic lawmakers and ethics watchdogs.
But the Trump family's fast-growing crypto empire is also stirring concern among lobbyists and executives who worry that the president could undermine the industry's policy agenda and even jeopardize his own efforts to establish the U.S. as the world's crypto capital.
'It's a distraction,' said one crypto lobbyist, who was granted anonymity to speak freely about Trump's business ventures. 'We're excited to have a president who is enthusiastic about crypto. But the way they've done this … it just doesn't look good.'
Already, Democrats managed to temporarily sidetrack a landmark crypto bill proposing how to regulate so-called stablecoins by dredging up the president's connections with the industry. And another crypto executive expects that a separate bill proposing how Wall Street regulators oversee the industry won't advance until after the midterm elections next year because of the uproar over Trump's crypto ventures. A third industry official said the efforts are giving crypto's opponents new fodder to bash the industry, despite it ultimately being an ethics issue.
The industry's brewing concerns present a new front in the pushback in Washington over Trump's increasing footprint within the industry, which critics have warned could become a new means for corporate actors and foreign entities to influence the administration.
Among Trump's crypto interests are the crypto startup World Liberty Financial and the $TRUMP memecoin, a personalized crypto token that he launched just before his inauguration in January. Last week, the president appeared — albeit briefly — at a private gala dinner at his golf club in Virginia for the memecoin's top holders, sparking national news coverage.
'The bottom line here is it's so inappropriate,' Public Citizen co-President Lisa Gilbert said. 'It's not something we should ever get comfortable with.'
Yet, neither the Trump administration nor the president's business ventures are blinking.
On Tuesday, Trump Media & Technology Group, the company behind Truth Social whose stock is majority owned by Trump, unveiled plans to raise $2.5 billion to finance a bitcoin buying spree.
Vice President JD Vance, meanwhile, is set to appear later on Wednesday at a bitcoin-focused conference in Las Vegas. In his remarks, Vance, a long-time crypto advocate who disclosed owning more than $250,000 worth of bitcoin last year, will lay out how the administration plans to forge a new and friendlier regulatory path for the industry compared to the Biden administration, a person familiar with the speech told our Irie Sentner.
'President Trump is dedicated to making America the crypto capital of the world and revolutionizing our digital financial technology,' White House spokesperson Anna Kelly said in a statement. 'His assets are in a trust managed by his children, and there are no conflicts of interest.'
Indeed, Trump has promised to give crypto the long-sought 'regulatory clarity' that President Joe Biden's watchdogs failed to provide the industry. And while Trump's interests in the market could gum up progress on the industry's policy preferences, crypto and the president appear to be inseparable, with Republicans in control of Washington for the foreseeable future.
'There's an ideological alignment,' said Nic Carter, a founding partner at the crypto investment firm Castle Island Ventures who has previously criticized the Trump crypto ventures. But, he added, 'the crypto industry wants to see results in Washington, and Washington wants this spigot of money to keep flowing.'
IT'S WEDNESDAY — Are you fretting about Trump's crypto ties? Have SEC tips? Want to talk Chicago food? Give me a shout: [e-mail]. And as always, send your tips, suggestions and personnel moves to Sam at [e-mail].
Driving the day
Vance speaks at Bitcoin 2025 at noon … The minutes for the Federal Reserve's May meeting are out at 2 p.m. …
Start your engines — Industry groups representing fintechs, payment businesses and banks are dialing up their public opposition to a politically thorny provision of Trump's 'big, beautiful bill.'
The House bill includes a new 3.5 percent tax on foreign remittances sent by non-U.S. citizens. On its face, the measure raises revenue from immigrants who send money out of the country. Trump has suggested he'd like to 'shut down' the outward flow of funds sent by undocumented immigrants, and top Republicans like GOP Policy Committee Chair Kevin Hern of Oklahoma have identified those transactions as a way to boost funding for national security projects.
But on Monday, the American Fintech Council published a letter to Senate Finance Chair Mike Crapo (R-Idaho), House Ways and Means Chair Jason Smith (R-Mo.), and Ranking Members Ron Wyden (D-Ore.) and Richard Neal (D-Mass.). They said the measure would have a 'disproportionate impact on already-marginalized communities seeking to contribute to the U.S. economy' and raised concerns about how it's inconsistent with existing state-level regulations.
The AFC's letter represents an escalation in industry-level pushback to the controversial remittance tax. Many Wall Street and financial industry groups have refrained from airing their specific grievances with Trump's legislative agenda, but the AFC's missive suggests that opposition to major components of the bill will likely grow.
AFC said it's working with other industry groups on a joint response. The Electronic Transactions Association — which counts large banks and payments businesses like JPMorgan Chase and Visa among its members — led a similar letter to House tax writers co-signed by other trade groups like the Financial Technology Association. ETA Executive Vice President Scott Talbott said the measure would harm low- and moderate-income households, while FTA President and CEO Penny Lee raised objections about how the bill could infringe on civil liberties and push cross-border payments into unregulated channels.
The Economy
Vibe shift? — The Conference Board's consumer confidence index spiked in May amid signs of a de-escalation in the trade war with China that poses serious risks to commercial inventories and prices. The unexpected surge provides Trump with a welcome reprieve from the doom-and-gloom that has dominated economic surveys through the early days of his second term. 'The rebound was already visible before the May 12 US-China trade deal but gained momentum afterwards,' Stephanie Guichard, senior economist, global indicators at the Conference Board, said in a statement.
— But the May survey still contained plenty of warning signs about the economy. The Expectations Index — which measures consumers' short-term outlook for income, business and labor market conditions — is still in territory that typically signals a recession is ahead.
— The Federal Reserve Bank of Dallas's monthly manufacturing survey also contained signs of improvement with an increase in an index tracking new orders, but its overall findings still indicated a contraction in manufacturing activity. Durable goods orders also fell in April, according to Census Bureau data.
— That doesn't bode well for future investment. Richmond Fed President Tom Barkin told Bloomberg that the uncertainty has resulted in businesses freezing investment and hiring.
'At the end of the day, there is little sign of resiliency in capex today,' Wells Fargo economists Shannon Grein and Tim Quinlan said in a client note. 'Businesses have grown increasingly cautious on the outlook and underlying capex conditions remain constrained, not just by continued uncertainty related to tariffs but around the cost and accessibility of capital and, perhaps most importantly, underlying demand conditions.'
At the regulators
Judge greenlights Treasury DOGE team — A federal judge in New York on Tuesday lifted the remaining legal restrictions preventing the Treasury Department's entire DOGE team from accessing the federal government's sensitive payment system that controls the flow of trillions of dollars, Michael Stratford reports.
Quintenz's exit strategy — Brian Quintenz, Trump's pick to lead the Commodity Futures Trading Commission, will resign from his positions with prediction market startup Kalshi and venture capital giant Andreessen Horowitz, if confirmed, Declan reports.
Independent mortgage lenders urge FHFA to crack down on FICO – The Community Home Lenders of America, which represents small and midsized independent mortgage banks, on Tuesday asked Federal Housing Finance Agency Director Bill Pulte to do something about FICO's recent string of price increases on obtaining mortgage credit scores, Katy O'Donnell reports.
FHFA should call 'for the cessation of any further credit score price hikes' while 'convening an FHFA Task Force to (1) undertake a review of these recent cost hikes, (2) find ways to hasten the arrival of a viable VantageScore platform for the conforming marketplace, but also (3) explore additional reforms,' the group wrote in a letter to Pulte.
TARIFFS
Crime all the time — Chinese shipping companies are pitching U.S. importers on schemes that avoid Trump's costly new tariff regime, The NYT's Ana Swanson and Lazaro Gamio report.
Venue change? — California Gov. Gavin Newsom's lawsuit against Trump's tariff policies may get moved to the New York-based U.S. Court of International Trade, Dustin Gardiner and Doug Palmer report.
Wall Street
At Goldman — The WSJ's AnnaMaria Andriotis reports on how Goldman Sachs CEO David Solomon beat back a wave of internal and external criticism in 2022 and 2023. Solomon 'has cemented control for the foreseeable future.'
Consultant class — The FT: 'McKinsey sheds 10% of staff in two-year profitability drive'