US lawmaker says TRUMP coin could risk national security  

Representative Maxine Waters, ranking member of the House Financial Services Committee (HFSC), led Democratic lawmakers out of a joint hearing on digital assets in response to what she called “the corruption of the President of the United States” concerning cryptocurrencies.In a May 6 joint hearing of the HFSC and House Committee on Agriculture, Rep. Waters remained standing while addressing Republican leadership, saying she intended to block proceedings due to Donald Trump’s corruption, “ownership of crypto,” and oversight of government agencies. Digital asset subcommittee chair Bryan Steil, seemingly taking advantage of a loophole in committee rules, said Republican lawmakers would continue with the event as a “roundtable” rather than a hearing.HFSC Chair French Hill urged lawmakers at the hearing to create a “lasting framework” on digital assets, but did not directly address any of Rep. Waters’ and Democrats’ concerns about Trump’s involvement with the crypto industry. He claimed Waters was making the hearing a partisan issue and shutting down discussion on a digital asset regulatory framework.Related: US stablecoin bill loses democrats amid Trump corruption concernsMagazine: Trump’s crypto ventures raise conflict of interest, insider trading questionsThis is a developing story, and further information will be added as it becomes available.

Democratic lawmakers in Washington are backing off support for crypto legislation amid heightened concerns over corruption, including the conduct of the Trump family’s World Liberty Financial (WLFI).In March, the GENIUS Act, which would regulate stablecoins in the US, passed a critical committee reading with the support of several pro-crypto Democrats. Democratic Senators Ruben Gallego, Mark Warner, Lisa Blunt Rochester, Andy Kim and Angela Alsobrooks voted with Republicans, opposite lead Democrat and prominent crypto critic Senator Elizabeth Warren.The bill passed the committee only after a number of changes were made, including stricter requirements for stablecoin issuers and provisions for Anti-Money Laundering, countering terrorism financing and risk management procedures. Now, it seems that even those provisions are insufficient to quell Democratic concerns. Following some high-profile crypto deals that personally enrich President Donald Trump, Congressional Democrats are pulling their support.Bipartisan efforts on stablecoin bills endangeredOf the five pro-crypto Democrats to pass the GENIUS Act in the Senate Banking Committee, four signed their names to a statement on May 3, saying that they do not feel comfortable with the direction stablecoin legislation is taking. “The bill as it currently stands still has numerous issues that must be addressed, including adding stronger provisions on anti-money laundering, foreign issuers, national security, preserving the safety and soundness of our financial system, and accountability,” the announcement reads.The statement does not explicitly call out corruption nor mention Trump by name, but taken alongside other measures from Democratic lawmakers, it shows a growing reticence to engage on cryptocurrency issues.As Cointelegraph reported on May 5, Representative Maxine Waters and other Democratic members of the House Financial Services Committee plan to leave a House of Representatives hearing on crypto titled “American Innovation and the Future of Digital Assets” on May 6. According to a staffer familiar with the matter, this would sink the hearing, as House rules require all committee members to be present. The hearing concerns a draft bill, announced by Representative French Hill and other top Republicans on May 5, that would change how US financial regulators, namely the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), treat cryptocurrencies.Related: New crypto bill draft seen to curb big crypto firm influenceWaters, who has previously called for bipartisan cooperation on crypto legislation, has harshly criticized Trump, specifically his WLFI crypto investment firm. She characterized his TRUMP memecoin, released on his inauguration, as “the worst of crypto” and has been particularly vocal about the WLFI USD1 stablecoin project.At a markup hearing on April 2 concerning the STABLE Act — a draft bill circulating the House regarding stablecoins — Waters said the bill, in its current form, allows the president and insiders to “enrich themselves at the expense of everyone else.”“If there is no effort to block the President of the United States of America from owning his stablecoin business […] I will never be able to agree on supporting this bill, and I would ask other members not to be enablers,” said Waters.Even Hill, a Republican leading the charge for crypto in Washington, said that Trump’s crypto projects complicate Congress’ ability to pass legislation.Stablecoin support as political leverageCorruption concerns may be one factor behind Democrats’ pumping the brakes on bipartisan crypto laws, but some observers believe it could be more of a political ploy. Aaron Brogan, a lawyer specializing in regulatory issues in the cryptocurrency industry, said it’s “unlikely that this group of Senators suddenly came to their senses and realized that the mostly benign stablecoin bill they had previously supported lacked protections they refused to name.”Brogan suggested that either lawmakers wanted to use support for the bill as leverage — Senate Majority Leader Chuck Schumer has reportedly urged Democratic lawmakers in private not to commit to the bill for this very reason — or an influential donor wants to kill the bill or use it as leverage. Related: Are Donald Trump’s tariffs a legal house of cards?Protect Progress, a major political action committee supporting crypto, donated millions to Gallego’s campaign, Brogan noted. He said it is possible that major donors to the committee (i.e., Coinbase) would rather see the bill replaced with something more to their liking. While he said it’s impossible to know for sure, “Coinbase has attempted to bundle the pending market structure legislation with stablecoins to make it more likely to pass,” he said. WLFI accused of shady dealingWLFI has already netted some $550 million from Trump token sales and is sealing more deals that will enrich its founders and board members, many of whom are Trump family members. One of them, Eric Trump, announced on May 1 that Abu Dhabi-based investment firm MGX would use USD1 to settle its $2-billion investment in global crypto exchange Binance.At Token2049, Eric Trump praised the UAE for its crypto-friendly approach, saying that the regulation-heavy EU is a “lost cause.”In November 2024, the founder of the Tron blockchain, Justin Sun, became the largest investor in WLFI when he bought some $30 million in TRUMP. More recent reports suggest he has spent nearly $70 million. On Feb. 24, just one month after Trump took office, the SEC, then with Acting Chair Mark Uyeda at the helm, halted its civil fraud investigation into Sun despite previous allegations that Sun and the Tron Foundation had illegally distributed tokens, concealed celebrity donations, and inflated trade volumes. Critics claimed that the president was selling exposure to the highest bidder when WLFI announced that top TRUMP tokenholders would be welcomed to a gala with the president himself. This prompted one lawmaker to suggest impeachment — a pipedream in a Congress with Republican majorities in both houses. WLFI has not responded publicly or on social media to these criticisms. In a May 5 interview with Meet the Press on NBC, President Trump downplayed the project, saying he was “not profiting from anything.” He said he hasn’t “even looked” at his portfolio.He also rejected the idea that he should forgo any profits from WLFi. “Should I contribute all of my real estate that I’ve owned for many years if it goes up a little bit because I’m president and doing a good job? I don’t think so,” he said.With purported scandals and pressure mounting on Democratic officials to block Republican efforts on the Hill, the possibility of a bipartisan stablecoin bill, much less a crypto framework, looks increasingly bleak. Magazine: Crypto wanted to overthrow banks, now it’s becoming them in stablecoin fight

Veteran US Internal Revenue Service (IRS) official Trish Turner was appointed to lead the agency’s digital assets division following the departure of two key crypto-focused executives.Turner, who has spent over 20 years at the IRS and most recently served as a senior adviser within the Digital Assets Office, will now head the unit, according to a report from Bloomberg Tax citing a person familiar with the situation.Her promotion marks a significant leadership transition at a time when US crypto tax enforcement is facing both internal and external pressures.On May 5, Sulolit “Raj” Mukherjee and Seth Wilks, two private-sector experts brought in to lead the IRS’s crypto unit, exited after roughly a year in their roles.Mukherjee served as compliance and implementation executive director, while Wilks oversaw strategy and development. Wilks announced his departure on LinkedIn, while Mukherjee confirmed his decision in a statement to Bloomberg Tax.“The reality is that federal employees have faced a very difficult environment over the past few months,” Wilks wrote. “If stepping aside helps preserve someone else’s job, then I am at peace with the decision.”Seth Wilks announced his departure on LinkedIn. Source: Seth WilksRelated: Coinbase files brief with US Supreme Court in support of taxpayers’ privacyIRS ramps up crypto scrutinyThe IRS has ramped up its focus on cryptocurrency in recent years, increasing audits and criminal probes targeting digital asset transactions.It also attempted to introduce broad crypto broker reporting requirements, which drew sharp criticism from industry stakeholders and was eventually overturned by President Donald Trump.Set to take effect in 2027, the so-called IRS DeFi broker rule would have expanded the tax authority’s existing reporting requirements to include DeFi platforms, requiring them to disclose gross proceeds from crypto sales, including information regarding taxpayers involved in the transactions.Related: NFT trader faces prison for $13M tax fraud on CryptoPunk profitsTurner’s leadership also comes during a shift in Washington’s approach to crypto regulation.With the return of the Trump administration in January, federal agencies have scaled back regulations perceived as burdensome to digital asset innovation.For instance, the Securities and Exchange Commission has dropped or paused over a dozen enforcement cases against crypto companies. Additionally, the Department of Justice has announced the dissolution of its cryptocurrency enforcement unit, signaling a softer approach to the sector.Internally, the IRS is also navigating instability. Over 23,000 employees have reportedly expressed interest in resigning after Trump reintroduced a deferred resignation policy, raising concerns about long-term staffing and morale within the agency.Magazine: Bitcoin to $1M ‘by 2029,’ CIA tips its hat to Bitcoin: Hodler’s Digest, April 27 – May 3