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Here’s what you’ll find in today’s edition:

• Casey’s update on how President Trump’s ties to the crypto industry is posing a challenge for pending legislation. 

• As issuers plot more crypto ETFs, the SEC wants more time to mull a litecoin proposal.  

Crypto lobbyists have a problem 

Just months after taking a euphoric victory lap around Washington to celebrate the new administration, it would appear the crypto industry has a Trump problem. 

2025 was supposed to be a historic year for crypto legislation. With a favorable White House and established bipartisan support for policy, lawmakers and industry members expected to have new laws passed before midterm elections. 

But, as Ben wrote about yesterday, nine Democrats pulled support for the current version of the stablecoin-focused GENIUS Act. They cited wanting stronger provisions around anti-money laundering and national security, for example. 

Then there are concerns over the president’s family’s crypto business endeavors. Thanks to Trump’s memecoin launch in mid-January, tensions have been building since before Inauguration Day. In the months since, World Liberty Financial (the Trump family’s crypto venture) has floated stablecoin plans and recruited investors.

Many Democrats, like Financial Services Ranking Member Maxine Waters, insist this is a clear conflict of interest, and lawmakers should not be advancing policy that would directly benefit Trump’s business initiatives.

“I am deeply concerned that Republicans aren’t just ignoring Trump’s corruption, they are legitimizing Trump and his family’s efforts to enrich themselves on the backs of average Americans,” Waters wrote in a Tuesday statement after she objected to a planned joint House hearing on crypto. 

“Through his crypto businesses, Trump has turned the office of the presidency into a personal money-making machine,” she added. 

The comments come after members of the House Financial Services and Agriculture committees gathered this morning for a joint hearing on the newly released crypto market structure bill discussion draft. 

The hearing didn’t get very far, though, as Waters objected to the gathering. Because unanimous approval is needed for joint hearings, she was successful in stopping the official proceedings. 

Digital Assets Subcommittee Chair Bryan Steil pivoted, and called for a roundtable discussion — a loophole allowing the witnesses to provide testimony and answer lawmakers’ questions. Waters then left the room, asking colleagues to join her for a separate meeting to discuss Trump’s crypto dealings. 

Financial Services Committee Chairman French Hill countered Waters, noting the market structure draft and the stablecoin-focused STABLE Act are intended to bring crypto out of regulatory purgatory. The bills, he said, seek to fill gaps in oversight that even President Biden admitted existed. Up until recently, they had significant bipartisan support. 

Crypto lobbying groups and Hill insiders have known for weeks that these legislative efforts would face roadblocks from Democrats. 

Groups have even proposed combining the market structure and stablecoin bills into a single piece of legislation. The theory was that it’s extremely unlikely lawmakers will pass two crypto bills, but the problem with one super bill is it gives everyone a lot more to fight over. 

The new market structure discussion draft in the House is similar to bills from the last session of Congress: FIT21 in the House and DCCPA in the Senate. 

Generally speaking, the legislation seeks to clarify the roles of the SEC and CFTC. It also outlines the process for listing tokens, consumer protections and disclosure requirements. A big difference between this draft and FIT21 is that the new version does not include the term “decentralized system.” A key criticism of FIT21 was that the focus on “decentralization” was too great, potentially making it more challenging for certain token issuers to be compliant. 

The key term here though is really “discussion draft.” The industry can now submit comments on the bill, so we’re still several steps away from a floor vote.

— Casey Wagner

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Where interest rates will likely land (unchanged from their current target) when the FOMC wraps its May policy meeting tomorrow. 

President Trump has said he hopes the central bank will cut sooner rather than later. Fed Chair Jerome Powell counters that it will need to keep monitoring the economic situation (like the impact of tariffs) before making any major moves.

A US litecoin ETF — and other altcoin products — will have to wait at least a little longer. 

But the chance such products see the light of day still appears quite good — and issuers continue plotting more crypto ETFs.

The SEC decided on Monday to delay its ruling on Canary Capital’s proposed spot LTC offering. It requested the following:

We might not get a ruling until the agency’s final deadline in October. 

Prior to the Monday delay filing, Bloomberg Intelligence’s James Seyffart held out hope that we could see a different result, writing on X that the “SEC went early & delayed a bunch of filings but not this. If any asset has a chance of early approval it's Litecoin IMO.”

You might recall that in February, he and colleague Eric Balchunas put the odds of a US spot litecoin ETF launching by the end of 2025 at 90%. 

The thinking went that LTC was one of the few assets the SEC had not previously labeled as a security. Also, like bitcoin, litecoin uses the proof-of-work consensus mechanism. 

Those 90% odds remain intact, Balchunas noted last week.

The Bloomberg pros also give spot solana products a 90% chance of approval by the year’s end. XRP products are next highest, at 85%. 

CME Group introduced SOL futures contracts in March. The derivatives marketplace is set to unveil XRP futures on May 19. 

There are also products currently holding both BTC and ETH that want to add more assets. Hashdex CIO Samir Kerbage called indexing “the next frontier” in the crypto investing space, telling me in March that his firm wants to ultimately create “the Nasdaq 100 for crypto.”  

With optimism comes more filings. 

Canary last week applied for a product that would hold SEI — a token with a market cap of roughly $1 billion (ranking 90th on CoinGecko). It would seek to earn more SEI “through the validation of transactions in the SEI Network’s proof-of-stake process,” the April 30 filing notes. 

Then on May 2, VanEck proposed an ETF offering exposure to BNB — the native token of the Binance-created BNB Chain. BNB’s market cap of ~$87 billion is fifth-highest among crypto assets — sitting between XRP (~$123 billion) and SOL (~$74 billion).

Kyle DaCruz, VanEck’s director of digital assets product, previously told me the SEC could wait for legislation — noting that following a framework would be easier than evaluating each crypto asset one by one.

Just when you thought you got away from Washington politics.

— Ben Strack

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• Related to Casey’s section today, Bitwise CIO Matt Hougan wrote in a Monday memo: “I’m increasingly concerned Congress will fumble the ball at the 1-yard line.” While he said politicians can “derail” crypto and that “the next few days and weeks will be fraught,” he ultimately believes a US stablecoin bill will pass.

• Speaking of bills, New Hampshire Gov. Kelly Ayotte signed into law a measure that allows the state treasurer to invest in digital assets like bitcoin. This marks the first BTC reserve-related law enacted by a US state.

• Net inflows into the US spot bitcoin ETFs have totaled more than $1.5 billion so far in May, Farside Investors data shows. Inflows have only trickled into the spot ether products during those three trading days ($27 million).