WASHINGTON, D.C. — U.S. President Donald Trump’s crypto ventures were once again under the microscope during a House Financial Services Committee hearing that otherwise saw legal experts express worries about how regulators might police digital assets under a market structure bill.
The committee held a “minority day” hearing — meaning the witnesses were primarily picked by the Democrats, the current minority party in the House — on Friday, letting lawmakers ask questions more targeted on concerns they have with the Digital Asset Market Clarity Act, the Republican-led market structure legislation that will receive a markup vote next week.
Maxine Waters, the ranking Democrat on the committee who’d demanding this extracurricular hearing after the panel met earlier in the week on the same topic, pointed to Trump’s various crypto efforts in her opening statement, saying her goal was to stop Trump from profiting off of his crypto ventures to the extent he has been.
“What I’m opposed to in this act … is the crooked president of the United States of America, who’s decided to use the office of the presidency to enhance his access to profits,” Waters said.
Republicans focused on a different tack: “Currently, there is no federal framework for non-security digital assets,” Committee Chair French Hill said in his own opening statement, a stance echoed by his colleagues Bryan Steil and Warren Davidson. They contend that Democrats and the administration of former President Joe Biden allowed years to pass in which they failed to protect consumers by offering no rules to oversee crypto.
Crypto has driven an ideological wedge into the Democratic Party on Capitol Hill, with many Democrats — typically skewing toward the younger members — supporting the advancement of digital assets legislation despite the direction of their leadership. Most of the Democrats attending this bonus hearing on the Clarity Act were in the crypto-critical camp, though Representative Jim Himes, a Connecticut Democrat, has supported crypto bills in the past and questioned witnesses at the hearing about his concerns that the bill may include loopholes that could allow financial firms to dodge oversight.
Himes, a yes vote on last year’s predecessor to the Clarity Act — the Financial Innovation and Technology for the 21st Century Act, or FIT21 — said some of the provisions in the new effort may allow for a carveout that can be abused by certain types of issuers under Securities and Exchange Commission regulations.
The Clarity Act itself is more complicated than it needs to be and does not address some of the cybersecurity risks posed to the cryptocurrency industry, said Carole House, a former White House adviser who is now a senior fellow at the Atlantic Council GeoEconomics Center. She pointed to recent crypto hacks, including crypto exchange ByBit, as an example.
Amanda Fischer, policy directorat Better Markets, a Washington group advocating for financial policies that favor the public, said her bigger issue was with the exceptions that exist for companies to seek regulation under the Commodity Futures Trading Commission rather than the Securities and Exchange Commission, saying that it might provide loopholes for issuers or other crypto companies that otherwise would be regulated under the SEC and be subject to securities registration and reporting requirements.
But as has been seen in other recent hearings, Trump’s crypto ties again reappeared as the star of the show.
Bart Naylor, a policy expert at Public Citizenand a former investigator for the Senate Banking Committee, said he believes Trump is specifically soliciting gifts through his memecoin and selling favors through actions like his memecoin dinner or by terminating SEC lawsuits against companies which donated money to him.
White House officials have routinely denied Trump is exhibiting a conflict of interests in his pursuit of digital assets business gains.
Waters had staged a walkout last month from what was meant to be a joint hearing of this and the House Agriculture Committee on crypto policy, though industry insiders were careful to note that not all the panel’s Democrats followed Waters’ departure.
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