In Response To President Trump's Shady Memecoin Sales, Durbin Calls For Additional Oversight Over Cryptocurrency Industry

WASHINGTON – U.S. Senate Democratic Whip Dick Durbin (D-IL), a member of the Senate Committee on Agriculture, Nutrition, and Forestry, participated in an Agriculture Committee hearing entitled “Stakeholder Perspectives on Federal Oversight of Digital Commodities.”  During the hearing, Durbin advocated for additional protections for Americans vulnerable to crypto ATM scams in addition to calling for increased federal oversight on crypto tokens to prevent President Trump from continuing to profit off his memecoin while serving in federal government.
Durbin began by speaking out against theCLARITY Act, a crypto market structure bill that fails to properly regulate the industry.
“TheCLARITY Act, which will receive a vote in the House this week, creates a loophole for crypto tokens known as ‘collectibles.’  That means these crypto tokens won’t have to register with financial regulators and would benefit from a lighter-touch regime.  In fact, ‘collectibles’ aren’t even considered ‘digital commodities’ in the bill and are basically exempt from most requirements.  When Coinbase, one of the largest crypto exchanges, went to court with the SEC, Coinbase… argued that the tokens listed in the SEC’s complaint were neither securities nor commodities,”Durbin began.
“Coinbase’s lawyer argued in court that these crypto tokens were like Beanie Babies—meaning, [Coinbase was] just trading ‘collectibles.’  But these ‘collectibles’ can involve multimillions of dollars.  Just ask President Trump, who listed his own memecoin on exchanges like Coinbase and Kraken—two exchanges that are part of the Crypto Council for Innovation,”Durbin said.“President Trump’s memecoin has no real use and trades its value based basically on popularity and hype—just like a Beanie Baby.  But that did not stop President Trump from auctioning off his memecoin and giving top investors access to a face-to-face dinner with the President of the United States.  Not only did President Trump make $315 million in fees by selling his memecoin, [but]… 764,000 unique wallets lost money to the President’s scheme… All the while, crypto exchanges like Coinbase and Kraken claimed they had a robust listing process and continue to perform due diligence.”
“What concerns, if any, do you have about the huge exception for ‘collectibles’ in any crypto market structure legislation?”Durbin askedMr. Timothy Massad, Director of Digital Assets Policy Project of the Mossavar-Rahmani Center for Business and Government at the Kennedy School of Government at Harvard University.“You talked about a black eye to the industry with this transaction involving the President.  I think it is more than a black eye. I think it is evidence of corruption.  The question and bottom line as far as I’m concerned is, what does the industry do if they are afraid of the President when it comes to regulation?”
Mr. Massad replied that theCLARITY Actdoes exclude collectibles as commodities, and he believes that the digital commodity exchanges shouldn’t trade anything unless they are regulated.
Durbin then spoke about the importance of regulating crypto ATMs as thousands of Americans, particularly seniors, are losing their lifesavings to crypto scammers.
“In 2024, the FBI reported that Americans lost $16.6 billion to crypto schemes, a 33 percent increase over the previous year.  The type of scam that I am concerned about involves a machine called a crypto ATM… What happens with the crypto ATM?  They put them in grocery stores and shops... Once a victim places their hard-earned cash in one of these machines, it disappears into a criminal’s wallet and is almost impossible to get back,”Durbin said.
“Here’s how it works: scammers call an unsuspecting victim, tell them they owe taxes to the IRS or a penalty for failure to appear for jury duty, but not to worry because they can pay it off at a crypto ATM.  They direct them to the nearest crypto ATM.  These people put their lifesavings, in some instances, into the criminal’s digital wallet.  In 2024 alone, scammers stole nearly $250 million from Americans.  And the stories are heartbreaking,”Durbin continued.
“This industry ought to wake up to this reality.  There is a misuse of one of their operative machines to scam people over and over again with huge sums of money.  Want to be known as a reputable industry?  Do something reputable like protecting consumers.  About 15 states have done it.  All of them should,”Durbin said.“When theGENIUS Actcame before Congress, I wanted to offer this amendment [on preventing crypto ATM scams, but they said] no amendments… If we have a second chance, whether it’s theCLARITY ActorGENIUS Act, let’s at least think about the consumers.”
Prior to the Senate passage of theGENIUS Act, Durbin attempted to offer anamendmentbased on hisCrypto ATM Fraud Prevention Act, which aims to crack down on crypto scams by adding layers of protections to crypto ATM transactions and requiring greater transparency from cryptocurrency ATM operators.  Ultimately, Republican leadership blocked theGENIUS Actfrom the amendment process, barring Durbin from adding his amendment.  Durbin voted against the passage of theGENIUS Act.
Video of Durbin’s remarks is availablehere.
Audio of Durbin’s remarks is availablehere.
Footage of Durbin’s remarks is availableherefor TV Stations.
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