The Honorable Members\u00a0 of the Senate Committee on Agriculture, Nutrition and Forestry
\nThe Honorable Members\u00a0 of the Senate Committee on Banking, Housing and Urban Affairs
\nWashington, D.C. 20510<\/p>\n
Dear Senators:<\/p>\n
On behalf of more than one million members and supporters of Public Citizen, we urge the members of the Senate Committees on Banking and Agriculture to oppose the Digital Asset Market Clarity Act as currently drafted.<\/p>\n
We recognize the efforts underway to develop a regulatory framework for digital assets. However, any such legislation must be grounded in important principles that many senators support<\/a>, \u00a0such as consumer protection, financial stability, and market integrity principles. These include: preserving state oversight and enforcement authority; preventing the \u201ctokenization\u201d of traditional securities in ways that evade registration and disclosure requirements; preventing illicit finance and abuse of the financial system; and ensuring that federal policy does not enable conflicts of interest, corruption, or self-dealing.<\/p>\n We further believe that any crypto legislation must close loopholes that would effectively allow stablecoins to pay interest or rewards, undermining existing banking and securities regulations.<\/p>\n Without these protections, the Digital Asset Market Clarity Act risks weakening regulatory safeguards, exposing consumers and investors to harm, and entrenching regulatory arbitrage rather than promoting responsible innovation. We therefore urge the Committees to reject this legislation.<\/p>\n Preemption:<\/strong> The bill fails to protect state oversight of cryptocurrency. (VIII Sec. 802) We urge Congress to ensure that any bill includes a provision specifying that the legislation does not preempt state consumer protection laws. States have long been charged with primary responsibility for protecting their citizens from fraud and misconduct. Today, every state maintains securities laws that operate in tandem with federal law to protect consumers from fraud and other unfair practices in connection with the offer, purchase, or sale of securities. This dual system of federal and state regulation has protected investors for nearly a century. Such a provision (savings clause) will allow investors to enjoy the full protection of both state and federal law. We attach a letter signed by organizations calling for strong protection for state oversight authority.<\/p>\n Tokenization:<\/strong> For decades, bad actors have attempted to raise capital from the public while evading federal registration and disclosure requirements designed to protect investors. The bill\u2019s imprecise language fails to clearly distinguish cryptocurrency assets from traditional securities representing ownership in established enterprises. For conventional operating firms, the bill allows parallel derivatives that can transact outside securities registration and disclosure. This could pave the way for more fraud. Beyond the principles this bill fails to honor, proposed legislation dangerously expands and interlocks banking into cryptocurrency as well as traditional commerce. American law has long separated banking from commerce. Lenders should not seek the default of their borrowers in hopes of taking over the business. This bill would allow banks to use cryptocurrency to buy oil, real estate and other real property.(V Sec. 505 h(2)) It effectively overrides the Volcker Rule prohibition on bank proprietary trading. So far, cryptocurrency\u2019s frequent price volatilities, bankruptcies and criminal fraud cases did not unsettle the broader financial markets. This bill would channel cryptocurrency tremors directly into the mainstream banking sector.<\/p>\n Interest\/Rewards and Illicit Finance<\/strong>:\u00a0 The GENIUS Act claimed to bar stablecoin issuers from paying interest. (The law also correctly states that stablecoins do not enjoy FDIC insurance.) But stablecoins are nevertheless paying de-facto interest via exchanges. The current draft appears to eliminate some rewards but falls short in curtailing circumvention for a sector with a record of rules-evasion. (IV Sec. 404) We attach commentary about how cryptocurrency and stablecoins enable illicit finance. Payment of interest\/rewards through exchanges for stablecoin transactions further enables illicit arms, drugs, and human trafficking. \u00a0The bill also provides inadequate enforcement of anti-money laundering laws.<\/p>\n Presidential corruption:<\/strong> Trump\u2019s cryptocurrency enterprises represent the greatest corruption in presidential history, as the attached letter signed by the nation\u2019s leading ethics experts affirm. The current bill fails to terminate or even curtail this massive grift.<\/p>\n We respect that cryptocurrency requires strong consumer, investor and systemic prudential regulation. But this bill will only further expand the opportunities for abuse, fraud and systemic peril.<\/p>\n Again, we appreciate the hours of negotiations, and the attention of many senate offices to our concerns. We do object to a mark-up scheduled for a mere two days following release of a draft (Tuesday, Jan. 13, 2 AM); and we support the call by Sens. Jack Reed, Chris Van Hollen, and Tina Smith for a hearing on the bill ahead of any committee vote.<\/p>\n For questions, please contact Martha Perez Pedemonti (at mperezpedemonti@citizen.org<\/a>) and\/or Bartlett Naylor (at bnaylor@citizen.org<\/a>).<\/p>\n Sincerely,<\/p>\n <\/p>\n Public Citizen<\/p>\n —————————————————————————————————————————–<\/p>\n <\/p>\n December 10, 2025<\/p>\n Honorable John Thune\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Honorable Mike Johnson<\/p>\n Majority Leader\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Majority Leader<\/p>\n US Senate\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0\u00a0 U.S. House of Representatives Honorable Chuck Schumer\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Honorable Hakeem Jeffries RE: Preserve Critical State-Level Investor-Protection Resources in Digital Asset Market Structure Legislation<\/strong><\/p>\n We, the undersigned organizations, write to express our concerns with recent federal legislative proposals to establish a new market structure for digital assets, including electronic trading and complex derivatives involving cryptocurrency, that would fail to preserve existing state laws and the means for consumers to enforce them. We urge Congress to ensure the continued viability of state laws and regulations in any federal market structure legislation by making it clear in the legislative text that the bill does not preempt state law and does not hamper the ability of states to adopt stronger protections for investors and consumers.<\/p>\n In our federalist system, states have long been charged with primary responsibility for protecting their citizens from wrongdoing such as fraud and misconduct. In recent years, state regulators, utilizing state law, have brought dozens of enforcement actions against bad actors in the digital asset industry, helping to ensure that harmed consumers are adequately remedied and protecting against future wrongdoing by putting bad actors on notice that illegal practices will be prosecuted.<\/p>\n Today, every state has securities laws that work in tandem with federal law to protect consumers from fraud and other unfair practices in connection with the offer, purchase, or sale of securities. This dual system of federal and state regulation has protected investors for nearly a century. Investors and consumers of cryptocurrency warrant this same level of dual protection.<\/p>\n Past legislative proposals concerning digital asset regulation, such as the CLARITY Act and FIT 21, would create federal frameworks for the digital asset and digital commodity industries. Those proposals, however, did not contain provisions to ensure that state laws and regulations in this area are not deemed preempted by the federal legislation. The absence of explicit language in the legislative text does not eliminate concerns regarding federal preemption. To provide this assurance, future bills should include a provision specifying that state consumer protection laws are not preempted by the legislation. Such a provision will allow investors to receive the full protection of both state and federal law.<\/p>\n In a rapidly evolving industry, such as the digital asset industry, the best protection for investors and the marketplace is for state and federal laws to work simultaneously. We urge Congress to include a savings clause for critical state consumer protection laws in any future legislation seeking to create a federal framework for digital assets.<\/p>\n Sincerely,<\/p>\n Advocates for Basic Legal Equality, Inc. cc: United States Senate Committee on Banking Housing and Urban Affairs; ————————————————————————————————————————–<\/p>\n <\/p>\n Letter from Ethics Leaders on Trump\u2019s Cryptocurrency Corruption <\/strong><\/p>\n Dear Member of Congress<\/p>\n We, the undersigned organizations and individuals committed to honest government, believe President Donald J. Trump\u2019s sprawling personal cryptocurrency ventures may constitute flagrant violations of anti-conflict statutes. As such, we urge you to accord special scrutiny as you consider legislation involving cryptocurrency. Voting to approve these bills will serve to ratify what may be perhaps the most conspicuous corruption<\/a> in presidential history.<\/p>\n Trump once dismissed bitcoin, the most popular cryptocurrency, as \u00a0\u201cbased on thin air.<\/a>\u201d It is a \u201cscam.<\/a>\u201d It can facilitate unlawful behavior, including drug trade and other illegal activity.<\/a>\u201d Now, he\u2019s the self-proclaimed cryptocurrency president.<\/p>\n This year, the Trump family announced an agreement with a fund backed by Abu Dhabi that \u201cwould be making a $2 billion business deal using the Trump firm\u2019s digital coins,\u201d according to the New York Times.<\/a> The Constitution (Article 1, Section 9) forbids accepting money (specifically a \u201cpresent\u201d or \u201cemolument\u201d) or anything of value from any \u201cking, prince, or foreign state.\u201d<\/p>\n Before this, Trump promised a presidential dinner to the largest new buyers of his cryptocurrency \u201cmeme,\u201d called \u00a0\u201cTrump.\u201d\u00a0 He restated<\/a> this \u201cgala\u201d opportunity May 5. Federal law strictly regulates payments to government officials, including gifts. Although the president may receive gifts, he may not \u201csolicit\u201d<\/a> gifts. These prohibitions begin with the Constitution\u2019s Emoluments Clause and are reiterated in the anti-bribery statute, 18 U.S.C. \u00a7 201, and federal regulations, 5 C.F.R. \u00a7 2635. Although section 2635.205<\/a> lists several exemptions from the prohibition, none exempts soliciting purchases for personal gain.<\/p>\n As to why the public might be interested in sending money, the website explains<\/a>: \u201cThis Trump Meme celebrates a leader who doesn\u2019t back down, no matter the odds.\u201d Under the Trump meme website\u2019s question<\/a>, \u201cWhat is a meme?\u201d the website explains: \u201cMerriam-Webster\u2019s meme noun: 1: an idea, behavior, style, or usage that spreads from person to person within a culture.\u201d<\/p>\n The website states<\/a> that \u201cTrump Memes . . . are not intended to be, or to be the subject of, an investment opportunity, investment contract, or security of any type.\u201d \u00a0Trump\u2019s Securities and Exchange Commission also stated that meme coins have \u201cno use.\u201d Other cryptocurrency observers deride memes generally as without value. Former aide Anthony Scaramucci<\/a> said Trump\u2019s effort demeans broader cryptocurrency efforts, calling it \u201cIdi Amin level corruption.\u201d\u00a0 Another commenter<\/a> said that the Trump meme \u201cis effectively a \u2018for sale\u2019 sign on the White House.\u201d Some, including an author in the Washington Post, characterized this token as a \u201csh\u2014coin.\u201d<\/a><\/p>\n In short, it appears Trump is not soliciting money in exchange for an investment or tangible product (such as a Bible, sports shoes, or a guitar<\/a>), but soliciting money in exchange for nothing\u2014that is, asking for a gift that will benefit him personally.<\/p>\n Already, Trump has profited millions from the meme and other ventures. His initial sale generated nearly $100 million. The salvo in April brought in roughly $100 million<\/a> more. Some new buyers come through the Binance exchange, once legally barred for US investors, meaning that Trump may well be violating the emoluments clause with this venture as well.<\/p>\n The dangers inherent in the Trump meme portend ominously. Should the president be allowed to enrich himself in this way, other politician might follow this path, rendering the prohibition on solicitation in 18 U.S.C. \u00a7 201 and the prohibitions on receipt of gifts by officials other than the president meaningless.<\/p>\n Paradoxically, while this Trump meme is worthless (by his own estimation) Trump managed to create an earlier cryptocurrency that is worth less. In October, 2024, he became the \u201cchief cryptocurrency advocate<\/a>\u201d for World Liberty Financial, a nascent cryptocurrency firm. The World Liberty Trump cryptocurrency is worse because it cannot be resold. This Trump cryptocurrency buys only \u201cgovernance,\u201d but only a minority share. Trump controls the majority of the governance tokens.<\/p>\n Now, the Senate considers bills to deal with the market structure for cryptocurrency trading.<\/p>\n At the very least, Congress must bar the president along with all elected officials and their families from owning, buying or otherwise trafficking in cryptocurrency. Americans must be assured that policy won\u2019t be fashioned by those profiting from the shape of the legislation.<\/p>\n Further, Congress should approve an amendment that restates conflict laws that already apply to the president. Namely, he may not solicit gifts<\/a>; he may not accept gifts from a foreign sovereign; he may not sell political favors.<\/p>\n <\/p>\n Sincerely,<\/p>\n Accountable.US\/Accountable.NOW ————————————————————————————————————————–<\/p>\n <\/p>\n Stop the Next Epstein; Stop Stablecoin \u201cRewards\u201d<\/strong><\/p>\n Congress\u2019 new cryptocurrency law transfers wealth from community banks and may open the door to the next Jeffrey Epstein.<\/em><\/p>\n \u00a0<\/strong>By Bartlett Naylor<\/p>\n A loophole in a cryptocurrency law Congress approved last summer may help finance the next Jeffrey Epstein.\u00a0 This overlooked snafu may permit Interest payments on stablecoins., potentially financing sex traffickers, cartels and sanctioned regimes.<\/p>\n Stablecoins are cryptocurrency where one dollar buys one token. The new law claims interest payments on stablecoins are banned, making the product less attractive than a traditional, FDIC-insured bank account. But major stablecoin issuers are sidestepping the ban by offering \u201crewards\u201d to purchasers \u2014 some of which exceed bank deposit rates.<\/p>\n This is not conjecture and where there is smoke there is fire. The Monster Jeffrey Epstein flirted with cryptocurrency to finance his human trafficking operation, as revealed by the trove of 20,000 documents<\/a> released by the House Oversight Committee. He also lived near Howard Lutnick, who led Cantor Fitzgerald, as it held the underlying assets for the Tether stablecoin cryptocurrency, which is the largest. Where is Lutnick now? He is now Trump\u2019s Commerce Secretary.<\/p>\n Epstein ultimately remained with traditional finance, using JP Morgan Chase<\/a> as they failed to ask any questions<\/p>\n The next Epstein may, and the current human traffickers do, favor stablecoins.<\/p>\n Human traffickers already prefer stablecoins because they offer fast, cross-border, semi-anonymous transfers \u2014 perfect for hiding illicit proceeds.<\/p>\n The trend is unmistakable:<\/p>\n In crime generally,<\/a> cryptocurrency makes for fast, cross-border, largely anonymous transactions. \u201cAt least $28 billion tied to illicit activity has flowed into cryptocurrency exchanges over the last two years,\u201d the New York Times reported<\/a> Nov. 17.<\/p>\n
\nWashington, DC 20510\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0Washington D.C. 20510<\/p>\n
\nMinority Leader\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0\u00a0Minority Leader
\nUS Senate\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0\u00a0\u00a0U.S. House of Representatives
\nWashington, DC 20510\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0Washington, DC 20510<\/p>\n
\nAmerican Association for Justice
\nAmericans for Financial Reform
\nCalifornia Advocates for Nursing Home Reform (CANHR)
\nCenter for Justice & Democracy
\nDemand Progress
\nFriends of the Earth US
\nJustLeadershipUSA
\nNational Association of Consumer Advocates
\nNational Consumer Law Center, on behalf of its low-income clients
\nNext 100 Coalition
\nOregon Consumer Justice
\nOregon Consumer League
\nOur Revolution
\nPeople’s Action Institute
\nPublic Citizen
\nPublic Good Law Center
\nPublic Justice
\nTexas Watch
\nThe Academy of Financial Education
\nThe Value Alliance
\nUltraViolet Action
\nVirginia Citizens Consumer Council<\/p>\n
\nUnited States Senate Committee on Agriculture, Nutrition, and Forestry<\/p>\n
\nVirginia Canter
\nCenter for Biological Diversity
\nConsumer Federation of America
\nAmbassador Norman Eisen (RET), \u00a0former White House Ethics Czar
\nEnd Citizens United
\nFree Speech for People
\nProf. Richard W. Painter
\nProject on Government Oversight (POGO)
\nPublic Citizen
\nState Democracy Defenders Action
\nProf. James A. Thurber
\n20\/20 Vision<\/p>\n\n