Democrats are drawing closer to the crypto industry despite Trump divisions

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5 hours ago

An advertisement for the cryptocurrency, Bitcoin, is displayed on a building in Hong Kong on Nov. 18, 2021. (AP Photo/Kin Cheung, File)
WASHINGTON — As U.S. President Donald Trump builds a crypto empire — including hosting a private dinner with top investors at his golf club — Democrats have united in condemning what they call blatant corruption from the White House.
But the Democratic Party's own relationship with the emerging crypto industry is far less cut and dried.
Work in the Republican-led Senate to legitimize cryptocurrency by adding guardrails has drawn backing from some Democrats, underscoring growing support for the industry in the party. But divisions have opened over the bill, with many demanding it prevent the Republican president and his family from directly profiting from cryptocurrency.
'I'm all on board with the idea of regulating crypto,' said Sen. Chris Murphy, D-Conn. 'But at this moment, when cryptocurrency is being so clearly used by Donald Trump to facilitate his corruption, I don't think you can close your eyes to that when you're legislating.'
The legislation is moving ahead more rapidly than Congress usually acts when an industry is new. But the big money and campaign donations flowing from cryptocurrency firms have made them a new powerhouse on the political scene, one that's increasingly gaining allies and capturing the attention of lawmakers.
A look at what to know about the industry's clout and the political fight over what's known as the GENIUS Act:
'Anti-crypto is a good way to end your career'
To understand the growing clout of the crypto industry, look no further than the 2024 election. Fairshake, a crypto super political action committee, and its affiliated PACs spent more than US$130 million in congressional races.
Fairshake spent roughly $40 million supporting Republican Bernie Moreno in Ohio in an effort to defeat Democratic Sen. Sherrod Brown. Brown, who lost to Moreno by more than 3 percentage points, was seen as a chief critic of the industry as the chairman of the Senate Banking Committee.
'DC received a clear message that being anti-crypto is a good way to end your career, as it doesn't represent the will of the voters,' Brian Armstrong, the CEO of Coinbase, wrote in a social media post the day after the 2024 election.
Coinbase — the largest crypto exchange in the U.S. and biggest contributor to Fairshake — does not view support for its industry as partisan, according to Kara Calvert, the company's vice president of U.S. policy. The industry also spent heavily to support Democrats Ruben Gallego and Elissa Slotkin in their races for open Senate seats in battleground states.
Fairshake spent $10 million in support of Slotkin during her successful Senate run against Republican Mike Rodgers, and Slotkin, who won the Michigan race by fewer than 20,000 votes, spoke in favor of crypto on the campaign trail.
Similar dynamics are setting up ahead of 2026 in contested House and Senate races. Fairshake said in January that it already had $116 million in cash on hand aimed at the 2026 midterm elections.
'We're not slowing down, and everything remains on the table,' Josh Vlasto, a spokesperson for Fairshake, told The Associated Press.
Hours before a May 19 vote to move forward on cryptocurrency legislation in the Senate, an advocacy group tied to Coinbase sent an email to the offices of U.S. senators warning that the vote would count toward their crypto-friendliness scores.
'What the spending does is put crypto on the map. It lets members know that this is not a phase, this is real industry, with real dollars, that is developing its hold in Washington,' said Calvert.
Democrats navigate around a 'crypto president'
A significant number of Democrats, 16, joined Republicans in advancing the crypto legislation. The GENIUS Act would create a new regulatory structure for stablecoins, a type of cryptocurrency typically pegged to the U.S. dollar. It is viewed as a step toward consumer protections and greater legitimacy for the industry.
The sticking point for many Democrats is that while the bill prohibits members of Congress and their families from profiting off stablecoins, it excludes the president from those restrictions.
Trump, once a skeptic of the industry, has vowed in his second term to make the U.S. the global capital of crypto. Meanwhile, he and his family have moved aggressively into nearly every corner of the industry: mining operations, billion-dollar bitcoin purchases, a newly minted stablecoin and a Trump-branded meme coin.
Days after Trump's interests in the industry became public in early May, Senate Minority Leader Chuck Schumer of New York urged the Democratic caucus to unite and vote against the package to have a stronger hand in negotiations, according to a person familiar with the matter who insisted on anonymity to discuss private discussions.
On May 8, a bloc of Senate Democrats who had previously backed the GENIUS Act reversed course — ultimately voting to block the bill from advancing. Negotiations between Senate Democrats and Republicans followed.
The new version of the bill is now expected to pass the 100-member Senate this month. Amendments are still possible. Schumer and Sen. Jeff Merkley, D-Ore. are expected to propose one that would bar the president and his family from profiting off stablecoins, though it's unlikely to pass.
'There is room for improvements as there often is with a lot of legislation. But with this in particular, we've got issues with the president,' said Democratic Sen. Mark Kelly of Arizona 'Having said that, this was negotiated with Democrats and Republicans. We got to a place. We voted on it. I expect this is the version we're going to pass.'
Still, the legislation is stirring unease. Schumer, asked if he's urging members to vote against the bill, noted that he has opposed the legislation and said 'there's division in our caucus on that issue.'
'There's a gaping hole in this bill that everybody sees,' Murphy said. 'After it's passed, it will be illegal for me to issue a cryptocurrency, but it's legal for the president of the United States.'
'If this bill passes, we kind of go from a dirt road to a paved road,' he said.
What comes next
If the Senate approves the stablecoin legislation, the bill will still need to clear the House before reaching the president's desk.
Crypto advocates say the next priority is pushing Congress for market structure legislation, a far more sweeping effort than simply regulating stablecoins.
'Stablecoin is one step of the path. Then you need market structure. We're hopeful that the Senate works together to pass something quickly,' Calvert said.
Some Democrats view the legislation as a chance to impose basic guardrails on a rapidly growing industry that's particularly popular among men and younger voters, two groups that drifted from the party in 2024.
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Associated Press writers Alan Suderman, Lisa Mascaro, Matt Brown and Mary Clare Jalonick contributed to this report.
Joey Cappelletti, The Associated Press