Trump-Linked USD1 Stablecoin Deal Faces Criticism from Senator Warren

TLDR:

Table of Contents

Senator Elizabeth Warren has withdrawn support for the GENIUS Act citing corruption concerns
Warren claims Trump’s family stablecoin USD1 surged to 7th largest due to a “shady” UAE deal
The $2 billion arrangement involves MGX (UAE firm) using USD1 for a Binance investment
Multiple senators (at least 10) have withdrawn support for the GENIUS Act
World Liberty Financial (WLFI) is delaying centralized exchange listings pending regulatory clarity

Senator Elizabeth Warren has withdrawn her support for the GENIUS Act, a stablecoin legislation that once enjoyed bipartisan support, citing concerns over a deal involving the Trump-backed USD1 stablecoin. According to Warren, the bill’s passage would result in an “illicit fortune” for World Liberty Financial (WLFI), the company behind USD1 co-founded by Eric Trump and crypto investor Zach Witkoff.

The controversy centers around a recent arrangement between WLFI and MGX, a UAE-based firm backed by Abu Dhabi’s sovereign wealth. This deal would use the USD1 stablecoin to settle MGX’s $2 billion investment into Binance, the global cryptocurrency exchange.

Warren took to social media to express her concerns, stating: “The Trump family stablecoin surged to 7th largest in the world because of a shady crypto deal with the United Arab Emirates—a foreign government that will give them a crazy amount of money.”

The Trump family stablecoin surged to 7th largest in the world because of a shady crypto deal with the United Arab Emirates—a foreign government that will give them a crazy amount of money.
The Senate shouldn’t pass a crypto bill this week to facilitate this kind of corruption. pic.twitter.com/4is9KgpXQb
— Elizabeth Warren (@SenWarren) May 4, 2025

The Massachusetts senator further warned that “The Senate shouldn’t pass a crypto bill this week to facilitate this kind of corruption.” Her statements reflect growing opposition to the GENIUS Act (Guiding and Establishing National Innovation for US Stablecoins) ahead of a full House vote.

Political Fallout and Industry Impact

The bill, which would establish the first U.S. regulatory framework for stablecoins, passed the Senate Banking Committee in March with bipartisan support. However, at least ten senators have now withdrawn their backing for the legislation over concerns about insufficient anti-money laundering protections and national security risks.

When questioned about potential conflicts of interest, President Trump responded, “I haven’t even looked,” adding, “If I own stock in something and I do a good job and the stock market goes up, I guess I’m profiting.”

Warren has attempted to amend the bill to prohibit stablecoins used in criminal activities and impose oversight on foreign firms, but her proposals were defeated. She warned that without proper safeguards, the GENIUS Act would enable a sitting president to personally profit from financial instruments used by foreign governments.

The political turmoil has had direct consequences for WLFI’s business plans. The company has reportedly paused its plans for listing on centralized exchanges, waiting for regulatory clarity before proceeding.

This delay could impact USD1’s competitive position against industry leaders like Tether. According to data from CoinGecko, USD1 currently ranks as the seventh-largest stablecoin in a global market that exceeds $245 billion in circulation.

The stablecoin is backed by short-term U.S. Treasuries, similar to many other tokens in the market. The deal was publicly announced by Witkoff during a crypto convention in Dubai, where he appeared alongside Eric Trump.

Donald Trump’s latest corruption?
A $2 BILLION stablecoin deal with a foreign crypto company that will benefit the Trump family business.
And it gets worse — the Senate is getting ready to bless this kind of grift.
But it's not too late to make changes.
Here's the latest: pic.twitter.com/3IaQOCZTfL
— Elizabeth Warren (@SenWarren) May 1, 2025

Senator Warren has been vocal in her criticism, describing the situation as one that “looks like corruption, smells like corruption,” and accusing lawmakers of “greenlighting the grift” by advancing the legislation without proper safeguards.
The GENIUS Act was previously expected to receive final approval in May, but enthusiasm has waned amid the growing controversy. President Trump has framed his crypto push as a geopolitical necessity, stating, “If we don’t do it, China’s going to,” and claiming millions of Americans support it despite earlier opposition from the Biden administration.

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