US President Donald Trump’s new crypto law is under fire from Sen. Elizabeth Warren, who warns it could repeat mistakes that led to the 2008 crash.
Based on reports from Vanity Fair, Warren says the GENIUS Act was shaped more by industry players than by public interest, and she fears ordinary Americans will pay the price.
GENIUS Act: Industry Influence Draws Fire
According to Warren, the bill was “coined” by crypto insiders eager to protect their own gains. She pointed out that firms linked to the Trump family rolled out memecoins like Official Trump and Melania, plus a USD1 stablecoin, all while pushing for looser rules.
Forbes put the president’s crypto take at $1 billion in June—higher than any other project he runs. Warren noted that Trump even disbanded the DOJ’s crypto enforcement unit, clearing the way for insiders to write the rules.
“Donald Trump is using the presidency to enrich himself through crypto, and he’s doing it in plain sight,” she said.
Crypto lawyers and lobbyists had a direct line to lawmakers, crafting language that favors big issuers at the expense of consumer safeguards. Warren warned that this setup hands too much power to a few, with little chance for Congress or watchdogs to step in.
Historical Echoes Loom
Warren drew a straight line back to the 2000 Commodity Futures Modernization Act. That bill deregulated over-the-counter derivatives, helping spark the 2008 financial crisis.
She recalled that crash cost 10 million American families their homes, jobs and savings. “When Washington works for industries like this,” she said, “a handful of people get really rich, and the American people pay the price.”
Warren’s point is clear: handing draft legislation to the very industry you’re meant to oversee rarely ends well.
Yet the GENIUS Act does include some tougher rules. It forces stablecoin issuers to hold high-quality reserves and submit to regular audits.
Tether, the biggest USD-pegged token, has already boosted its reserves to meet the new thresholds. Even so, historians of finance warn that strong paper rules can unravel if checks and balances vanish.
GENIUS Act: Stablecoin Risks Take Center Stage
Meanwhile, some economists say the GENIUS Act risks returning the US to a patchwork of private currencies. He points to Free Banking Era chaos, when banks issued their own notes and payment networks broke down.
Today, tech giants from Walmart to Amazon could launch branded coins, bypassing banks and card networks. That could mean hundreds of private dollars floating side by side, each with its own failure risk.
Featured image from Pexels, chart from TradingView
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