Howdy. Ed here.

The crypto industry and their Republican allies just learned a painful lesson — they’re not going to get anything passed without Democratic support. 

And that changes the political calculus as more legislation moves forward in the weeks to come, including a stablecoin measure and a market structure bill in the House of Representatives.

For all the momentum of the first 100 days of President Donald Trump’s second term, it bears remembering that the Republicans hold Congress by a slim margin — seven votes in the House and three in the Senate.

On Thursday, Senator John Thune, the majority leader, failed to muster the 60 votes needed to advance the landmark stablecoin bill to the next stage in potential approval, Aleks Gilbert and I reported. 

To be sure, Thune was attempting to fast-track the legislation, which is why he needed the super-majority. Still, two weeks ago the so-called Genius Act looked like a slam dunk. In the end, the South Dakota senator couldn’t find the 10 Democrats he needed to get it over the line.

“I just don’t get it, I don’t know what more they want,” said Thune on the floor of the Senate.

Answering that question is now vital as Senate Republicans and their friends in the crypto industry regroup to move their agenda forward. 

They may want to turn to a statement issued by Senator Elizabeth Warren in March, shortly after the bill was introduced. 

Warren, the ranking minority member on the Senate Banking Committee, elucidated a raft of shortcomings in the bill on protecting consumers, the financial system, and national security from unfettered dollar-pegged cryptocurrencies. 

But the really interesting bit was Warren’s support for a “sensible stablecoin bill.” Indeed, Democrats were game for the legislation — five Democrats joined Republicans to vote the bill out of the Senate Banking Committee. 

While expressing support for bipartisanship is a bromide, the crypto industry clearly understands the importance of courting Democrats. On Thursday, Kristin Smith, the outgoing CEO of the Blockchain Association, emphasised the need for “bipartisan discussion.” 

Moreover, Anthony Scaramucci, the longtime Bitcoin investor and hedge fund manager, said way back in January that Democrats were primed to support well crafted legislation. 

After the industry spent more than $130 million on pro-crypto candidates in the 2024 election, Democrats were wary of taking a hard line against its agenda, he said.

Scaramucci also said a bipartisan approach would lessen crypto’s identification with the GOP and bestow digital assets with more mainstream appeal.

After the stablecoin bill’s setback, bipartisanship isn’t just desirable — it’s going to be necessary. 

ICYMI

• Democrats storm out of hearing on crypto bill over Trump ‘corruption’
  A rift over US crypto policy deepened last Tuesday as several Democratic lawmakers walked out of a joint hearing between the House Financial Services and Agriculture committees.

• German police shutter crypto anonymiser tied to Bybit hack and seize $38m
  In the latest round of fallout from the recent $1.5 billion hack of Bybit, German law enforcement authorities seized $38 million from a crypto swapping platform last Friday, according to officials.

• Samourai Wallet developers stuck in legal limbo after prosecutors reject dismissal bid
  The developers of Samourai Wallet have long championed their privacy-first Bitcoin app as a shield against financial surveillance. But prosecutors aren’t buying it.

Story of the Week

Trump memecoin makes $455m for traders like Dingaling, and the token’s backers

“It is open corruption.”

Besides making millions, the biggest winners trading the world’s first-ever presidential memecoin all have one thing in common: an impeccable sense of timing.

Within a day of its launch, the $TRUMP memecoin ballooned to over $14.5 billion.

Less than a week later, it had halved. But not before a handful of quick-draw crypto traders nabbed more than $133 million along the way.

Comment of the Week

Alex Mashinsky, the onetime CEO of Celsius, the giant crypto lender that cratered in 2022, was sentenced to 12 years in prison last week. The crypto founder, who pleaded guilty to fraud in December, had sought a one-year sentence. But federal prosecutors forcefully rebutted his request.

DL News is an independent news organisation that provides original, in-depth reporting on the largely misunderstood world of cryptocurrency and decentralised finance. From original stories to investigations, our journalism is accurate, honest and responsible.

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