The US House of Representatives has once again put in motion the effort to restrict stock trading amongst lawmakers but the discussion has since shifted to cryptocurrency. The Associated Press in reporting the latest development indicate that the legislators are split on whether the prohibition should extend to digital currencies because of the direct impact it may have on a sector that contributed considerably to the campaign coffers of politicians vying for office in 2024 as well as a number of incumbents holding crypto.
The main issue is no longer whether stricter ethics regulations are appropriate for politicians, but rather the borderline those ethics regulations may have. Politico reports that a bipartisan effort to mandate the use of blind trusts for politicians ran into difficulties on one question: should Bitcoin and all cryptocurrencies be treated like regular shares?
Congresswoman Abigail Spanberger from Virginia asserts that cryptocurrencies should be so classified as political leaders do have the opportunity to impact their price via legislation. Congressman Chip Roy from Texas disagrees with her and states that cryptocurrencies are “a little different,” adding that legislators should still be allowed to use digital currencies as a hedge against inflation.
The discussion is also reminiscent of the ethics campaign that has previously been reported by Cryptopolitan, which included the proposal by Rep. Bryan Steil in respect to making trading by Congress stricter.
Why digital assets are the sticking point
The increasing role of cryptocurrency in Washington clarifies why the cryptocurrency matter is so polarizing. According to the Campaign Legal Center, ten sitting members of Congress are estimated to have between $750,000 and $2 million in crypto assets. Meanwhile, crypto became one of the largest sources of political contributions, amounting to about $119 million during the 2024 elections, while Politico suggests that the amount reached over $160 million.
Critics argue that lawmakers should not be able to trade the same assets they regulate. Sen. Jon Ossoff has said members of Congress should not buy or sell cryptocurrencies while writing crypto legislation.
Senator Cynthia Lummis, who is well known for supporting crypto, has taken a different route. According to her, she has put her own crypto investments in blind trusts voluntarily, but does not think this should be obligatory for all lawmakers as this might put extra stress on those politicians with less financial assets.
A disclosure law that never bit
Congress attempted to address the issue by enacting the STOCK Act in 2012, which prohibited insider trading by members of Congress and obligated them to report their transactions within 45 days. It has not, however, had much of an effect in calming any criticism against the issue.
The highest penalty under the law for failing to report transaction within the allotted time is set at merely $200 and there has been no case in which a member of Congress has been prosecuted for insider trading as per the law. Moreover, it has also been pointed out by legal experts that the Speech or Debate Clause of the Constitution poses an additional barrier in the implementation of the law.
Educational research indicates the law altered certain trading practices but did not eliminate the underlying issue of conflicts of interest. According to a study published in the International Review of Economics & Finance in 2024, which analyzed more than 181,000 trades made by members of Congress between 2004 and 2022, politicians’ stock buying declined after the enactment of the STOCK Act.
Nevertheless, trading continued to occur at a high rate during congressional sessions and in times of geopolitical turmoil.
What the new bill would change
According to the Harvard Journal on Legislation, the latest reform initiative revolves around the Restore Trust in Congress Act which has more than 80 co-sponsors as it was introduced to the House of Representatives in September 2025. This bill aims at preventing politicians, their spouses, and children who depend upon them from owning or purchasing individual stocks. The biggest unresolved question remains whether the bill would include cryptocurrencies.
The bill garnered attention when the Harvard Journal on Legislation published a report stating that more than fifty lawmakers had made more than two thousand financial transactions in companies affected by Donald Trump’s reciprocal tariff announcement within 55 days of implementing the new policy in February 2025.
Nonetheless, new findings make the case for a total ban problematic. A working paper published by Haotian Chen and Bruce Sacerdote in 2026 by the National Bureau of Economic Research suggests that the pattern of the congressional investment portfolios was either similar or even less successful than that of the general market from 2012 through 2023.
Instead of undermining the argument for reform, this revelation changes the conversation. It makes the debate no longer about whether legislators manage to beat the market but about whether they should own investments that might be affected by the laws they pass. The advocates of more regulations, including those that may apply to cryptocurrencies, think that safeguarding public confidence matters more than demonstrating illicit profits.
