Senate Democrats Question Binance-Trump Stablecoin Ties Amid Blocked Stablecoin Legislation

Democratic lawmakers are raising concerns over reported financial links between cryptocurrency exchange Binance and ventures tied to the Trump family, following a recently revealed $2 billion deal involving a Trump-backed digital token.

What Happened: Senators Chris Van Hollen of Maryland and Elizabeth Warren of Massachusetts sent a letter to top Treasury and Justice Department officials seeking details on the matter and its implications for ongoing federal oversight of Binance, according to Bloomberg.

The inquiry follows a report that USD1, a stablecoin issued by a company under Trump family control, was used in March to settle a multi-billion-dollar investment by Abu Dhabi's MXG into Binance.

The transaction, first disclosed publicly on May 1, has triggered new scrutiny of Binance's compliance record and raised ethical questions about political entanglements in digital asset markets.

Binance, the world’s largest crypto exchange, has already admitted to major compliance violations.

Its former CEO, Changpeng Zhao, pleaded guilty in 2023, stepped down, and recently served a short prison sentence in the United States.

Lawmakers argue the new information linking the firm to political figures warrants further investigation, especially given the exchange’s checkered legal history.

Also Read: Coinbase Launches 24/7 Bitcoin, Ethereum Futures Trading: What Does That Mean?

In the letter, the senators pressed Treasury Secretary Scott Bessent and Deputy Attorney General Lisa Monaco to clarify what actions are being taken to ensure Binance adheres to its previous plea agreement.

They also asked for updates on Binance's promised withdrawal from the U.S. market and whether the company ever sought clemency for Zhao from federal officials, an allegation previously reported by The Wall Street Journal.

What’s Next: Senators are also seeking information about whether Binance discussed listing a new Trump-related stablecoin or its business with World Liberty Financial, another Trump-linked crypto venture, during any meetings with Treasury or Justice Department representatives.

The letter was issued a day after Senate Democrats blocked a long-anticipated stablecoin bill.

While some lawmakers cited missing language in the bill, others objected to a clause that would have barred Trump and other top officials from profiting from digital asset firms during or after their time in office.

As of now, the legislation remains in limbo, with its path forward uncertain.

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