After the failed Senate procedural vote on the GENIUS Act, negotiations continued over the last week, led by a bipartisan group of negotiators including Republican Sens. Bill Hagerty, Cynthia Lummis and Tim Scott and Democratic Sens. Kirsten Gillibrand, Angela Alsobrooks, Ruben Gallego and Mark Warner. A revised draft of the bill was circulated to Senators late last week and procedural votes are scheduled for Monday, May 19. Republican Senators Rand Paul and Josh Hawley voted against GENIUS in the first vote, and if they remain opposed, the GENIUS Act will need support from at least nine Democrats to advance the legislation this week.

Senate Republicans blocked Sen. Richard Blumenthal’s unanimous consent request to pass his resolution to stop President Donald Trump from accepting payments and gifts from foreign governments, including foreign government investments in digital assets ventures owned by President Trump and his family.

The SEC withdrew a 2019 joint statement with FINRA regarding broker-dealer custody of digital asset securities, while also issuing related FAQs.

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Congress

Hearings

• This week
  • On May 20, the House Appropriations Financial Services and General Government Subcommittee will hold a hearing on Oversight Hearing of the U.S. Securities and Exchange Commission.

Legislation

• Senate negotiators circulated a revised draft of the GENIUS Act to create a regulatory framework for stablecoins. (Thursday text)(Sunday text). Procedural votes to advance to debate on the bill have been scheduled for Monday, May 19.

• Sens. Richard Blumenthal, Sheldon Whitehouse (D-RI), Bernie Sanders (I-VT), Adam Schiff (D-CA), Mazie Hirono (D-HI), Peter Welch (D-VT), Tammy Duckworth (D-IL), Cory Booker (D-NJ), Elizabeth Warren (D-MA), Jon Ossoff (D-GA), Amy Klobuchar (D-MN), Chris Coons (D-DE), and Chris Van Hollen (D-MD) introduced a resolution directing the Senate Legal Counsel to bring a civil action against President Trump to enforce the Foreign Emoluments Clause on various findings including, “Whereas MGX Fund Management Limited is an investment firm established and backed by the government of the United Arab Emirates; Whereas, on May 1, 2025, MGX Fund Management Limited announced an agreement to use a stablecoin from the cryptocurrency business World Liberty Financial, which is owned in part by President Trump and members of his family, to complete a $2,000,000,000 deal with Binance Holdings Ltd.; Whereas, as a result of the MGX Fund-Binance deal, President Trump and the family of President Trump stand to receive hundreds of millions of dollars from a foreign state.” (Text)

Correspondence

• Sens. Elizabeth Warren (D-MA) and Chris Van Hollen (D-MD) sent a letter to President Trump expressing concern over the President’s trip to the Middle East and urging President Trump to divest from USD1 and any related financial interests before negotiating with foreign governments that could use the stablecoin to influence U.S. policy.  (Letter)(Press release)

• Warren and Sen. Jeff Merkley (D-OR) sent a letter to Zachary Witkoff, Co-Founder of World Liberty Financial (WLF), requesting the company preserve and provide documents and communications related to its stablecoin, USD1, and its interactions with federal agencies. (Letter)(Press release)

• Sens. Cynthia Lummis (R-WY) and Bernie Moreno (R-OH) sent a letter to Treasury Secretary Scott Bessent requesting Treasury exercise its authority to make administrative changes under the corporate alternative minimum tax to provide tax parity to corporations that invest in digital assets. (Text)

• Sens. Ron Wyden (D-OR), Richard Blumenthal (D-CT), Mazie Hirono (D-HI), Sheldon Whitehouse (D-RI), Peter Welch (D-CT), Jon Ossoff (D-GA), Amy Klobuchar (D-MN), and Adam Schiff (D-CA) sent a letter to Senate Majority Leader John Thune (R-SD) demanding Senate Republican leadership hold a vote to stop Donald Trump from accepting payments and gifts from foreign governments after Senate Republicans blocked a Blumenthal’s resolution. (Letter)(Press release)

• Reps. Jamie Raskin (D-MD), Gerald Connolly (D-VA), and Joe Morelle (D-NY) sent a letter to Treasury Secretary Scott Bessent demanding that Treasury make available all suspicious activity reports (SARs) related to the Trump family’s recently launched crypto venture World Liberty Financial (WLF) and Trump-branded meme coins. (Letter)(Press release)

Publications

• Democratic negotiators on the GENIUS Act released a Negotiation Wins Summary, saying, “As the result of hard-fought negotiations, Democrats won major victories on a range of critical issues. We strengthened provisions on anti-money laundering, foreign issuers, national security safeguards, consumer protection, and measures to preserve the safety and soundness of our financial system. The bill has made substantial bipartisan progress since introduction and especially in the last week, these changes from the Rule 14 version lay the foundation for a safer, more secure framework.”  (Summary)

• Senate Banking Ranking Member Elizabeth Warren (D-MA) released a document on The Latest GENIUS Act Draft Continues to Fuel Trump’s Crypto Corruption, saying, “President Donald Trump and his associates have pocketed hundreds of millions of dollars from his crypto ventures. The President stands to make hundreds of millions more from his USD1 stablecoin each year. The latest GENIUS Act draft circulating online does not include any provision to prevent Trump and the Trump family from raking in enormous amounts of money from their corrupt cryptocurrency schemes. Instead, it would grow the stablecoin market and fuel Trump’s crypto profits.” (Document)

• Warren also released an analysis of the draft GENIUS Act revisions, on saying, “Current draft paves the way for more Trump crypto corruption; expands giant national security loophole for Tether; permits Big Tech companies to issue their own stablecoins; and fails to address several other fundamental flaws.” (Document)

• Rep. Katherine Clark (D-MA) published an op-ed on Trump’s Attack On Harvard Is Just The Beginning in Fox News, saying, “…self-enrichment — has defined his first 100 days in office. Whether he’s hawking cars at the White House, selling scammy crypto coins, or openly manipulating the stock market, he is enriching himself, his family, and his wealthy donors. All this while the American people and small businesses face skyrocketing costs due to Trump’s tariffs.” (Op-ed)

Trump Administration

Commodity Futures Trading Commission (CFTC)

• Acting Chair of the Commodity Futures Trading Commission Caroline Pham announced she will leave the agency when President Trump’s nominee for CFTC Chair, Brian Quintenz, is confirmed. In addition, Republican commissioner Summer Mersinger announced she will leave the CFTC at the end of May.

Securities and Exchange Commission (SEC)

• The SEC Division of Trading and Markets announced it was withdrawing a July 8, 2019 joint statement of the staffs of the Division of Trading and Markets and the Office of General Counsel of the Financial Industry Regulatory Authority, Inc. (FINRA) regarding broker-dealer custody of digital asset securities. The Division also issued a set of frequently asked questions relating to the application of certain broker-dealer financial responsibility rules and transfer agent rules to crypto asset activities and distributed ledger technology. (FAQs)(Press release)

• The SEC Crypto Task Force hosted a roundtable on Tokenization: Moving Assets Onchain: Where TradFi and DeFi Meet.

• The Task Force will hold its next roundtable DeFi (Decentralized Finance) and the American Spirit on June 9.

Noteworthy Quotes and Events

ADMINISTRATION

Securities and Exchange Commission (SEC)

• In remarks regarding the SEC FAQs, Commissioner Hester Peirce said, “These FAQs are incremental, not comprehensive. The staff and the Commission still have much more work to do. For example, many market participants have urged us to replace the special purpose broker-dealer statement with a more fit-for-purpose statement addressing how broker-dealers may custody crypto assets that are securities, including tokenized versions of traditional securities. In the meantime, the SPBD continues to be a non-exclusive safe harbor upon which broker-dealers can rely. In addition, market participants have asked for guidance on the net capital treatment of other crypto assets. I also am eager to hear whether the industry believes additional clarity or other actions by the SEC with respect to transfer agent rules would be helpful to facilitate onchain tokenization efforts.” (Remarks)

Crypto Task Force Roundtable on Tokenization: Moving Assets Onchain: Where TradFi and DeFi Meet

• At the Crypto Task Force roundtable on tokenization, Chair Paul Atkins said, “In order for the United States to be the “crypto capital of the planet” as envisioned by President Trump, the Commission must keep pace with innovation and consider whether regulatory changes are needed to accommodate on-chain securities and other crypto assets. Rules and regulations designed for off-chain securities may be incompatible with or unnecessary for on-chain assets and stifle the growth of blockchain technology. A key priority of my Chairmanship will be to develop a rational regulatory framework for crypto asset markets that establishes clear rules of the road for the issuance, custody, and trading of crypto assets while continuing to discourage bad actors from violating the law. Clear rules of the road are necessary for investor protection against fraud – not the least to help them identify scams that do not comport with the law. It is a new day at the SEC. Policymaking will no longer result from ad hoc enforcement actions. Instead, the Commission will utilize its existing rulemaking, interpretive, and exemptive authorities to set fit-for-purpose standards for market participants. The Commission’s enforcement approach will return to Congress’ original intent, which is to police violations of these established obligations, particularly as they relate to fraud and manipulation.” (Remarks)

• In opening remarks on Getting Smart – Tokenization and the Creation of Networks for Smart Assets, Commissioner Hester Peirce said, “Absent a compelling reason grounded in fact and law, the Commission should treat tokenized securities the same as traditionally issued securities. Under this approach, for example, the type of database used to record ownership of securities does not affect the substance of the securities issued, nor does the use of a crypto network give rise to a new or different type of security. A crypto network can constitute all or part of the issuer’s books maintained by its transfer agent. Tokenized mutual fund shares and tokenized privately issued securities should be eligible for the exceptions for such securities from the Advisers Act qualified custodian requirement. Tokenization may raise some legal challenges related, for example, to the integration with DeFi, application of the transfer agent rules and National Market System requirements, use of permissionless networks, and appropriate classification as certificated versus uncertificated securities.” (Remarks)

• In her remarks on Tokenization: Our Field of Dreams? Remarks at the Crypto Task Force Roundtable on Tokenization, Commissioner Caroline Crenshaw said, “Let’s ensure that what we’re contemplating is appropriately scoped to the portion of the market that participates in crypto – recently estimated to be less than 5% of U.S. households – and not detrimental to the “TradFi” markets on which most Americans depend for their financial well-being.” (Remarks)

• In remarks on Tokenization of Real World Assets, Commissioner Mark Uyeda said, “As we consider the implications of new technologies, we should design a framework that focuses on critical safeguards rather than trying to address every conceivable investment permutation and scenario.  This exercise is nothing new and the same principles that helped regulation move from paper certificates to electronic recordkeeping and from faxes to texts can similarly guide us to accommodate new technologies.” (Remarks)

CONGRESS

GENIUS Act

• Sens. Bill Hagerty (R-TN) and Kirsten Gillibrand (D-NY) issued a joint press release with statements on the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act. Hagerty said, “Next week, the Senate will make history when we debate and pass the GENIUS Act that establishes the first ever pro-growth regulatory framework for payment stablecoins. This bill will cement US dollar dominance, protect customers, increase demand for US treasuries, and ensure that innovation in the digital asset space is in the hands of the United States of America, not our adversaries.” Gillibrand said, “Stablecoins are already playing an important role in the global economy, and it is essential that the U.S. enact legislation that protects consumers, while also enabling responsible innovations. The bipartisan GENIUS Act will provide regulatory clarity to this important industry, keep innovation on shore, add robust consumer protection, and reaffirm the dominance of the U.S. dollar. The crafting of this bill has been a true bipartisan effort and I’m optimistic we can pass it in the coming days.” (Press release)

Trump Digital Assets

• Sen. Richard Blumenthal (D-CT) tweeted, “Clearly, we struck a nerve with our simple, straightforward questions to World Liberty Financial. Maybe their hyper sensitivity to factual answers indicates they have something to hide. Or perhaps Trump’s cronies know that the only asset behind Trump’s corrupt crypto venture is Trump’s name—his unconstitutional abuses of power. World Liberty Financial is dodging disclosure & concealing facts because it’s a convoluted racket of grift & corruption, & I’ll continue to demand accountability & transparency for the American people.”

• Blumenthal also tweeted, “To stop Donald Trump’s self-enriching lawless thuggery, & protect its own lawful powers, the Senate must invoke the Constitution through legal action in federal court. Having just defeated exploitive colonial despots, & fearing foreign influence on home-grown tyrants, the Framers explicitly prohibited the corruption that is becoming Trump’s trademark—accepting luxury jets & potentially millions in crooked crypto payments. What the Framers never anticipated was the pathetic submission of Congress to the whims of a tyrant. I’m introducing this resolution to demand the Senate assert its authority & require Trump’s compliance w/the Constitution, & I’ll be calling for its passage on the Senate Floor. I challenge Senate Republicans to prove that they are more than mere lackeys to President Trump’s self-enrichment schemes & show that the Senate still has a spine by joining this effort.”

• Blumenthal also tweeted, “In the wake of this Trump trip, watch for more Mideast nations investing in his corrupt crypto schemes—like UAE’s recent $2 billion deal. Actually, watching alone may be futile. he deals are nondisclosable—facts shrouded in secrecy. His crypto coins are “Heads, I win, Tails, you lose”. Buyer beware. Trump’s illegal profits from crypto ventures—$Trump & World Liberty Financial—have already made him $100’s of millions, putting a “For Sale” sign on the White House in “pay to play” deals. These illicit gains violate at least the Constitution’s Emoluments Clause.”

• Sen. Elizabeth Warren (D-MA) tweeted, “A $2B foreign crypto deal using Trump’s stablecoin. The convicted criminal, who still owns 90% of the crypto exchange, asking Trump for a pardon. All while Republicans push a bill to boost the stablecoin market. Corruption doesn’t get clearer than this.”

• Warren also tweeted, “A company with ties to China is pouring as much as $300 million into Donald Trump’s memecoin—while the Senate is negotiating a crypto bill that can supercharge the President’s crypto corruption. We’re at a crossroads, and the GENIUS Act must not pass without serious guardrails.”

• Warren also tweeted, “Trump’s stablecoin is shady and a national security risk. He’s cashing in on foreign crypto deals—and weakening guardrails that protect our advanced technology. The Senate shouldn’t greenlight this corruption by passing the GENIUS Act without fixes.”

• Warren also tweeted, “President Trump’s crypto corruption is so bad the WSJ Editorial Board agrees with me. In their words, it appears to be a “conflict of interest in selling access to the President.” Congress cannot pass crypto legislation without putting a stop to this.”

• Rep. Frank Pallone (D-NJ) tweeted, “What do you mean the Speaker of the House doesn’t know anything about the “meme coin thing”? He pushed a through bill to deregulate crypto. Or is it that because it’s an obviously corrupt scheme tied to the Dear Leader, he suddenly can’t comment?”

• Sen. Adam Schiff (D-CA) delivered floor remarks saying, “But that’s not even the most corrupt deal of the 114-day old Trump presidency, because, coming in at number one, of the top ten best deals for Donald Trump and worst deals for you, the taxpayer, is Donald Trump’s crypto scheme. You’ve heard about the meme coin by now. This is the logo of the meme coin. The President’s most brazen cashing in, a corrupt effort that’s already made him and his family billions of dollars between its soaring values and the trading fees. This meme coin has gone up and down in value, but the thing is, every time it gets traded, every time it’s bought or sold, this guy gets a cut. He gets the fees estimated already at the value of hundreds of millions of dollars. It’s like posting his Venmo account online – inviting personal monetary tributes from foreign powers, foreign investors or whoever is willing to pay up. You’ve heard about the private dinner that they’re offering associated with this meme coin. The top 220 meme coin owners, many of whom are foreign investors, invited to a private dinner with the President of the United States. Businesses are buying and jockeying to be one of the favored few who also get a private audience with him, if they’re willing to buy millions of meme coins. Not to mention a personal tour of the White House. But beyond the meme coins and the dinner parties, there’s something else also brewing behind the scenes. As I speak, Eric Trump and Don Jr. are getting into the action, jetting around the world, building their own financial empire in the crypto business space. In Dubai, the Trump family’s World Liberty Financial firm announced the joint venture capital firm backed by the government of Abu Dhabi that would invest $2 billion using Trump digital currency.” (Press release)

• Schiff tweeted, “Why is Donald Trump in the Gulf right now? Because that’s where the money is. Whether it’s crypto schemes, Trump Towers, or 747s – it’s all about how he can line his own pockets.”

• Rep. Terri Sewell (D-AL) tweeted, “My constituents can’t afford to bribe Trump by funneling money into his crypto scheme or buying him a new jet. So instead of getting a tax break, they get their health care taken away. Corruption plain and simple.”

• Sen. Chris Murphy (D-CT) tweeted, “I know Trump’s crypto scams can seem hard to understand. So I went the Senate floor to break down the most outrageous one. A foreign government is investing $2 billion in Trump’s coin to get favorable treatment from the Administration. A wild corruption.”

• Murphy also tweeted, “I will block any arms sale to a nation that is doing direct personal business with Trump. We should have a full Senate debate and vote. UAE’s investment in Trump crypto and Qatar’s gifting of a plane is nuclear grade graft. An unacceptable corruption of our foreign policy.”

• Sen. Jeff Merkley (D-OR) tweeted, “It’s a stunning public display of corruption: The White House and President Trump are selling access to the government for personal profit. That’s why I wrote the End Crypto Corruption Act and am pushing for an ethics investigation!!”

• Merkley also tweeted, “Profoundly corrupt: people wishing to cultivate influence with Trump can do so by buying cryptocurrency that he owns or controls, making him richer!! It’s just plain wrong. That’s why I wrote the End Crypto Corruption Act!”

• Oversight Committee Democrats tweeted, “Wow, when you’ve lost Ben Shapiro… If Joe Biden accepted $400 million jets and his family started crypto scams while he was in office, GOPoversight would’ve gone scorched earth. But for Trump? Complete silence.”

• Sen. Jeanne Shaheen (D-NH) tweeted, “This President’s business dealings—between his crypto coin scheme, his investments in Qatar for a golf course, this plane—raise serious questions. Is he more committed to the American people or himself, his bank account and his family?”

• House Judiciary Dems tweeted, “Foreign dictators, strongmen, pardon-seekers and influence-buyers funnel untold hundreds of millions, maybe billions, into Trump’s memecoins and crypto scams, using the anonymity of blockchain and foreign wallets to hide the art of the steal.”

• Sen. Chris Van Hollen (D-MD) tweeted, “Whether he’s accepting a luxury plane from Qatar or auctioning off access to the White House through his family’s crypto schemes, Trump is making clear that he’s willing to sell his presidency for personal gain to the highest bidder. Kleptocracy in action.”

• Rep. Greg Cesar (D-TX) tweeted, “Tonight, Trump is attending a dinner for top tech and crypto donors. Attendees will pay $1.5M / plate to hear from Trump & his “crypto czar.” The ultra-wealthy get a literal feast & special access to the president. Working people don’t even get crumbs.”

Miscellaneous

• Sen. Mike Lee (R-UT) tweeted, “Letters of Marque and Reprisal aren’t just an option for hitting Mexican cartels… Congress can empower Americans to hack-back against blackmailers and cybercriminals, seizing their digital assets and crippling their operations.”

• Sen. Dick Durbin (D-IL) tweeted, “Instituting oversight and regulations on cryptocurrency is necessary to protect consumers. I met with Brian Quintenz, nominee to be Chairman of CFTC, to discuss putting American consumers first and ensure that the digital asset market plays fair, should he be confirmed.”

• Sen. Cynthia Lummis (R-WY) tweeted, “Our edge in digital finance is at risk if U.S. companies are taxed more than foreign competitors. Berniemoreno & I urged the USTreasury to lift an unintended tax burden on U.S. digital asset companies. To lead the world in digital assets, we need a level playing field.”

• Rep. Zach Nunn (R-IA) tweeted, “If America doesn’t write the rules for digital assets, China will. We’re working in a bipartisan way on the FinancialCmte to fuel innovation in states like Iowa and set smart guardrails that protect consumers and competition.”

• Sen. Bill Hagerty (R-TN) tweeted, “Great to see Chairman Atkins’ work underway at the SEC to develop clear rules for digital assets. Under his watch, the Commission’s approach will no longer rely on ad hoc enforcement actions, but provide long-needed clarity to the digital asset ecosystem and the American public.”

• Rep. French Hill (R-AR) tweeted, “We believe the bill we’ve written to create a regulatory framework for digital assets will bring clarity to the US market and make us a leader in global fintech.”

• Rep. Abe Hamadeh (R-AZ) tweeted, “On Stand With Crypto Day, Congressman Hamadeh brought together blockchain and cryptocurrency entrepreneurs from the Southwest to discuss economic opportunities in the blockchain sector and advocate for a regulatory framework that balances consumer protection and innovation.”

About Zero One Strategies

Zero One Strategies is a boutique government relations practice dedicated to navigating the complex landscape of U.S. federal policy in emerging technologies. As advancements in technology continue to outpace regulatory frameworks, Zero One Strategies aims to provide strategic guidance and bipartisan advocacy for innovators and businesses operating at the forefront of technological development.

The practice focuses on key areas such as artificial intelligence, blockchain, decentralized technologies, cybersecurity, data, and digital infrastructure, as well as the multiple policy issues impacting these sectors, including tax and financial services.

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