A group of US Senate Democrats known for supporting the crypto industry have said they would oppose a Republican-led stablecoin bill if it moves forward in its current form.

The move threatens to stall legislation that could establish the first US regulatory framework for stablecoins, according to a May 3 report from Politico.

Per the report, nine Senate Democrats said in a joint statement that the bill “still has numerous issues that must be addressed.” They warned they would not support a procedural vote to advance the legislation unless changes are made.

Among the signatories were Senators Ruben Gallego, Mark Warner, Lisa Blunt Rochester and Andy Kim — all of whom had previously backed the bill when it passed through the Senate Banking Committee in March.

The bill, introduced by Senator Bill Hagerty, is formally known as the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act.

Related: Fed’s Powell reasserts support for stablecoin legislation

Senate prepares to vote on stablecoin bill

The Senate is expected to begin floor consideration of the bill in the coming days, with the first vote potentially taking place next week.

The bill has been championed by the crypto industry as a landmark step toward regulatory clarity. However, the Democrats’ about-face reflects growing unease within the party.

Although revisions were made to the bill after its committee approval to address Democratic concerns, the lawmakers said the changes fell short. They called for stronger safeguards related to Anti-Money Laundering, national security, foreign issuers, and accountability measures for noncompliant actors.

The statement was also signed by Senators Raphael Warnock, Catherine Cortez Masto, Ben Ray Luján, John Hickenlooper and Adam Schiff.

A copy of the statement. Source: Alex Thorn

Senator Kirsten Gillibrand and Senator Angela Alsobrooks were absent from the list, who co-sponsored the bill alongside Hagerty.

Despite their objections, the Democratic senators emphasized their commitment to shaping responsible crypto regulation. They reportedly said they “are eager to continue working with our colleagues to address these issues.”

Related: US banks are ‘free to begin supporting Bitcoin’

Crypto needs a stablecoin bill

On April 27, Caitlin Long, founder and CEO of Custodia Bank, criticized the US Federal Reserve for quietly maintaining a key anti-crypto policy that favors big-bank-issued stablecoins, despite relaxing crypto partnership rules for banks.

Long explained that while the Fed recently rescinded four prior crypto guidelines, a Jan. 27, 2023, statement was left intact in coordination with the Biden administration.

The guidance, according to Long, blocks banks from engaging directly with crypto assets and prohibits them from issuing stablecoins on permissionless blockchains.

However, Long noted that once a federal stablecoin bill becomes law, it could override the Fed’s stance. “Congress should hurry up,” she urged.

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Bitcoiners and United States government officials have criticized Arizona Governor Katie Hobbs’s decision to veto a bill that would have allowed the state to hold Bitcoin as part of its official reserves.

“This will age poorly,” Casa co-founder and cypherpunk Jameson Lopp said in a May 3 X post. Bitcoin (BTC) entrepreneur Anthony Pompliano said, “Imagine the ignorance of a politician to believe they can make investment decisions.”

Call for government officials who understand Bitcoin is “the future”

“If she can’t outperform Bitcoin, she must buy it,” Pompliano said. Crypto lawyer Andrew Gordon said, “We need more elected officials who understand that Bitcoin and crypto are the future.”

Source: Julian Fahrer

Wendy Rogers, who co-sponsored the bill with State Representative Jeff Weninger, also voiced her disappointment.

“Politicians don’t understand that Bitcoin doesn’t need Arizona. Arizona needs Bitcoin,” Rogers said.

On May 2, Hobbs vetoed the Arizona Strategic Bitcoin Reserve Act, which would have permitted Arizona to invest seized funds into Bitcoin and create a reserve managed by state officials. “Today, I vetoed Senate Bill 1025. The Arizona State Retirement System is one of the strongest in the nation because it makes sound and informed investments,” Hobbs said.

Source: Dr. Danish

Rogers said she would refile the bill during her next session. Rogers also pointed out that Arizona’s state retirement system already holds stocks of Michael Saylor’s Strategy (MSTR).

“Which is basically a leveraged Bitcoin ETF. Arizona’s Strategic Bitcoin Reserve bill will be back. HODL,” Rogers said. The stock price of Strategy rose 32% in April, the most significant monthly gain since November 2024.

Related: US gov’t actions give clue about upcoming crypto regulation

However, well-known crypto skeptic Peter Schiff sided with Hobbs. “The government should not be making decisions to use public funds to speculate in cryptocurrencies,” Schiff said.

Arizona would have become the first US state to establish a Bitcoin Strategic Reserve if it had passed.

Arizona joins several other US states where similar efforts have failed. Similar proposals in Oklahoma, Montana, South Dakota and Wyoming have stalled or been withdrawn recently.

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OKX founder and CEO Star Xu has publicly defended the crypto exchange after Tron founder Justin Sun accused it of failing to act on a law enforcement request to freeze stolen funds following a recent hack of Tron’s official X account.

“OKX also has consumers protection policy according to law, we can’t freeze a customer’s funds according to your personal X post or an oral communication. I think you should understand it as the CEO of HTX,” Xu said in an X post.

OKX says there is no communication in the spam box, either

Xu said that the crypto exchange had not received any related correspondence through OKX’s official channels. “Our LE cooperation team just checked the email, including the spam box; we haven’t received any request related with this case,” Xu said.

Source: Star Xu

In what is now an unavailable X post, but was screenshotted by Xu, Sun had earlier claimed that OKX has not responded to a “freeze notice” sent to its official email address from a “relevant law enforcement agency.” Sun said that he had no other way to contact OKX’s compliance department.

“These stolen funds do not belong to me; I’m acting to protect the community,” Sun said. On May 3, Tron DAO told its 1.7 million X followers that its account had been compromised. Tron explained that during the breach, an unauthorized party posted a malicious crypto token contract address, sent direct messages, and followed unfamiliar accounts.

“If you received a DM from our account on May 2, please delete it and consider it the work of the attacker.”

In response to Sun’s claims of inaction, Xu publicly called on him to provide a screenshot showing when and where the law enforcement request was made.

The Tron incident is one of several recent security breaches involving high-profile crypto accounts on X.

Related: Over 14,500 Tron addresses at risk of silent hijacking

Kaito AI, an artificial intelligence-powered platform that aggregates crypto data to provide market analysis for users, and its founder, Yu Hu, were the victims of an X social media hack on March 15. The hackers opened up a short position on KAITO tokens before posting that the Kaito wallets were compromised and advised users that their funds were not safe.

Just a few weeks before, on Feb. 26, The Pump.fun X account was compromised to promote a fake governance token called “PUMP” and other fraudulent coins.

Meanwhile, the X account of UK member of Parliament and Leader of the House of Commons, Lucy Powell, was hacked on April 15 to promote a scam crypto token.

Magazine: Crypto wanted to overthrow banks, now it’s becoming them in stablecoin fight