The Trump administration is signaling a legislative push for a crypto market structure bill in April, a move that comes as related controversies and market volatility highlight the urgent need for clearer rules.
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Trump White House Targets April for Crypto Bill Amid 20% Crash in Linked Token
The Trump White House is targeting April for legislative action on a crypto market-structure bill, a move to clarify rules for digital assets like Bitcoin as a linked token, World Liberty Financial (WLFI), crashes nearly 20 percent.
"The White House said it expects action on market-structure legislation within April," crypto journalist Pete Rizzo reported on April 11, underscoring that clearer rules for the digital-asset market could be imminent.
The legislative push comes as World Liberty Financial, a Trump-family-linked crypto project, faces heavy criticism for borrowing $75 million against its own WLFI token, which has since dropped nearly 20% in value. The project's treasury now accounts for 55% of the total value locked on the affiliated Dolomite lending platform, creating significant systemic risk according to a CryptoSlate report.
The potential passage of the bill, likely the pending CLARITY Act, could reduce investment uncertainty and attract institutional capital. However, its progress is complicated by allegations of corruption and pay-to-play influence surrounding Trump-linked crypto entities, which Democrats argue must be addressed in the final legislation.
FTX-Style Borrowing Raises Alarms
The controversy centers on World Liberty Financial’s treasury routing billions of its WLFI governance tokens to Dolomite, a DeFi lending protocol whose co-founder also serves as the crypto project’s chief technology officer. The treasury borrowed approximately $75 million in stablecoins, primarily its own USD1, using its own token as collateral. This activity pushed the utilization of Dolomite’s USD1 pool to 93 percent, making withdrawals difficult for other users. Critics, citing a CoinDesk analysis, draw comparisons to the circular borrowing structure that contributed to the 2022 collapse of FTX, where the exchange’s proprietary FTT token was used as collateral for loans. While World Liberty Financial’s actions are transparent on the blockchain, the concentration risk remains, with a drop in WLFI’s price potentially triggering cascading liquidations. The project dismissed concerns as “FUD” on X, stating it was an “anchor borrower” and was “nowhere near liquidation.”
CLARITY Act Faces Political Headwinds
The market-structure legislation is widely believed to be the CLARITY Act, a bill intended to provide a comprehensive regulatory framework for the U.S. crypto industry. Its advancement is seen as a bullish catalyst for the sector. However, the bill's path is fraught with political challenges. Democrats on the House Financial Services Committee have repeatedly called for stronger ethics safeguards to prevent administration officials or their families from profiting from crypto ventures while shaping regulation. These calls have been amplified by a series of events, including a $10 million SEC settlement with crypto entrepreneur Justin Sun over his Trump-linked projects, a pardoned Binance founder whose firm later took a $2 billion position in the USD1 stablecoin, and a $500 million deal involving a UAE-linked firm and World Liberty Financial. These incidents form the contentious backdrop against which the White House is now pushing for legislative clarity.
This article is for informational purposes only and does not constitute investment advice.
