Main Points：
- Introduction of COIN Act: Senator Adam Schiff and nine Democrats propose legislation to curb “monetary abuse” of digital assets by the President and other public officials.
- Scope & Prohibitions: Ban on issuance, support, or endorsement of cryptocurrencies, meme coins, NFTs, and stablecoins by covered officials from 180 days pre-tenure through two years post-tenure.
- Triggering Event: Emergence of WLF’s USD1 stablecoin and President Trump’s reported $57.4 million income tied to it.
- Family Stake Decline: Trump family holdings in World Liberty Financial (WLF) shrank from 75% (Dec 2023) to 40% (Jun 2024).
- Broader Legislative Context: Companion “TRUMP in Crypto Act” in the House by Rep. Maxine Waters aims to block meme-coin promotions and other abuses.
- Political Feasibility: Uncertain passage in split Congress; likely presidential veto if approved.
- Recent Developments: Growing bipartisan concern; other senators exploring ethics rules for digital-asset investments.
- Implications for Crypto Investors: Potential new compliance requirements, market shifts, and decentralized governance responses.
1. Background: From Traditional Ethics to Digital-Asset Oversight
In the United States, ethics legislation has long restricted public officials’ private financial dealings—particularly stock trading—to prevent conflicts of interest. Yet, until recently, the rapid rise of cryptocurrencies, non-fungible tokens (NFTs), and stablecoins fell outside these traditional frameworks. On June 23, 2025, Senator Adam Schiff (D-CA), joined by nine other Democratic senators, introduced the “COIN Act” (Corruption Of Our Institutions by NFTs and digital assets Act) to explicitly cover digital assets under ethics rules. Their stated goal is to prevent the “monetary abuse” of blockchain-based instruments by the President, First Family, and other high-ranking officials, closing a perceived loophole in existing disclosure and trading bans.
2. Key Provisions of the COIN Act
2.1 Covered Officials and Timeframe
The COIN Act extends from 180 days before an official assumes office through two years after leaving office. Covered persons include the President, Vice President, Cabinet members, Supreme Court justices, and their spouses and dependents.
2.2 Asset Classes
- Cryptocurrencies & Meme Coins: Any digital token.
- Non-Fungible Tokens (NFTs): Unique digital collectibles.
- Stablecoins: Particularly targeted, given emerging fiat-pegged offerings.
2.3 Prohibitions
- Issuance, support, endorsement, or promotional activities involving these digital instruments.
- Acquisition of any new positions in digital assets while in the covered window.
2.4 Disclosure & Enforcement
The bill mandates rapid public disclosure of pre-existing holdings and strengthens investigative powers for the Office of Government Ethics (OGE). Noncompliance may trigger civil penalties and referral for criminal prosecution.
3. Trigger Event: Trump, WLF, and the USD1 Stablecoin
The catalyst for the COIN Act was reporting that President Donald Trump’s family earned $57.4 million in 2024 from World Liberty Financial (WLF), a platform linked to a stablecoin called USD1—launched in March 2024. USD1, pegged 1:1 to the U.S. dollar, has seen substantial institutional activity:
- In May 2024, an Abu Dhabi-based investor disclosed plans to settle a $2 billion Binance investment via USD1.
- The Trump family’s stake in WLF decreased from 75% in December 2023 to 40% by June 2024 (Figure 1).
- According to data from State Democracy Defenders Action, as of April 2024, President Trump’s digital-asset holdings totaled $2.9 billion, roughly 40% of his net worth.
4. Companion Legislation in the House
Representative Maxine Waters (D-CA) introduced the “TRUMP in Crypto Act”—S.T.R.U.M.P.: Stop Trading, Retention, and Unfair Market Payoffs in Crypto Act. This bill zeroes in on meme coins and aims to:
- Block issuance of any token directly tied to a public official’s name or likeness.
- Prohibit official-sponsored “dinner events” or promotional gatherings for top holders of said tokens.
- Mandate separate oversight for digital-asset events involving public office.
This measure was publicized on the same day that Trump hosted a dinner for early investors in his meme coin—a direct challenge to transparency and fair-market concerns.
5. Recent Developments & Industry Reaction
5.1 Senate Ethics Committee Hearings
In late May 2025, the Senate Ethics Committee scheduled hearings on digital-asset investments by lawmakers, signaling bipartisan interest. Senators on both sides have raised questions about enforcement feasibility and industry definitions (e.g., what qualifies as a “meme coin”).
5.2 Crypto Industry Pushback
Major crypto trade groups, including the Chamber of Digital Commerce and Coin Center, have lobbied for carve-outs to avoid stifling innovation. They argue that broad prohibitions could hamper decentralized finance (DeFi) and tokenized governance experiments.
5.3 Market Impacts
- Stablecoin issuances briefly dipped in Q2 2025 amid regulatory uncertainty, though total market cap rebounded to $150 billion by June 2025.
- NFT trading volumes, once at $5 billion monthly, have stabilized around $3 billion as more robust disclosure rules loom.
6. Political Feasibility & Outlook
Given the current Senate split (50–50) and a Republican Vice President as tie-breaker, passage of the COIN Act faces an uphill battle. Even if both chambers approve, a Presidential veto is expected. Overriding the veto would require a two-thirds majority in each house—a steep challenge given party margins.
However, the proposal has shifted the debate, prompting the Treasury and SEC to consider rule-making to address executive-branch digital-asset conflicts of interest. Observers forecast potential agency guidance later in 2025 that might echo COIN Act provisions in administrative form.
7. Implications for Crypto Investors and Practitioners
- Compliance Readiness: Institutions should prepare for enhanced disclosure regimes and tighten KYC/AML protocols around politically exposed persons (PEPs).
- Product Design: Token developers may begin embedding “ethics switches” or transfer-lock features that disable public-figure involvement.
- Market Sentiment: Short-term volatility may arise around any bill milestones; long-term, clearer rules could bolster institutional confidence.
- DeFi Governance: Expect on-chain governance proposals to include ethics-related modules to self-regulate public official participation.
Conclusion
The COIN Act represents a landmark attempt to update U.S. ethics law for the digital-asset era—directly targeting the blurred lines between political office and blockchain ventures. While its prospects in a divided Congress remain slim, it has already spurred industry dialogue and administrative scrutiny. For investors and developers, the bill underscores a critical truth: as digital assets permeate mainstream finance, governance frameworks—both on-chain and off-chain—must evolve to safeguard integrity and public trust.
