Congressman Urges Treasury to Halt Crypto Reserve Plans

House Representative Gerald E. Connolly of Michigan has urged the US Treasury to halt all efforts to establish a strategic crypto reserve in the United States. In a letter dated March 13, Connolly addressed Treasury Secretary Scott Bessent, expressing concerns over potential conflicts of interest involving US President Donald Trump and the lack of benefits such a reserve would provide to the American public.

Connolly criticized the proposed "cryptocurrency reserve," arguing that it offers no tangible benefits to the American people and would primarily enrich the president and his supporters. He also highlighted that the Trump administration's plan to select specific cryptocurrencies through social media constitutes "unsound fiscal policy."

Connolly further asserted that the administration's proposal would result in a waste of taxpayer funds, as the Federal Reserve had previously described the idea as "the dumbest idea ever." He emphasized that there is no strategic necessity for the government to invest in the volatile and speculative cryptocurrency market, and that such a move would merely serve as a speculative hedge for bitcoin speculators, backed by taxpayer dollars.

The White House, however, has clarified that the Digital Asset Stockpile will only hold onto cryptocurrency that has already been forfeited. Additionally, the Bitcoin reserve will only make acquisitions through budget-neutral strategies that do not impact taxpayers. Connolly also pointed out that Trump did not consult with Congress regarding the Bitcoin reserve plan and did not obtain congressional authorization to create it.

Connolly raised concerns about potential conflicts of interest between Trump's presidential duties and the Trump Organization's ownership of the crypto platform World Liberty Financial, as well as the Official Trump (TRUMP) memecoin. He referred to the TRUMP token as a "money grab" that has allowed Trump-linked entities to profit from trading fees.

Connolly has requested that Bessent provide documents and communications related to the creation of a Bitcoin reserve, as well as a complete list of steps taken by the Trump administration to avoid conflicts of interest. He also asked for a list of companies in which the Treasury has crypto-related financial interests and inquired whether the Presidential Working Group on Digital Asset Markets has reviewed financial disclosures by administration officials, including Elon Musk.

The Strategic Bitcoin Reserve is planned to initially use cryptocurrency forfeited in federal criminal or civil cases. The Digital Asset Stockpile, on the other hand, will consist of cryptocurrencies other than Bitcoin, which could include various other digital assets.