Democrats Introduce Bill to Curb Crypto Dealings by Public Officials

Senator Adam Schiff, along with nine other Democratic lawmakers, has introduced the Curbing Officials’ Income and Nondisclosure, or COIN, Act. This legislation aims to prevent what they describe as the "financial exploitation of digital assets" by public officials, including the president and their family members. The bill comes in response to Donald Trump’s connections to the cryptocurrency industry, particularly his ties to World Liberty Financial (WLF), a crypto platform backed by members of his family.

Schiff emphasized the ethical, legal, and constitutional concerns surrounding Trump’s cryptocurrency dealings. The proposed bill extends a prohibition on issuing, sponsoring, or endorsing cryptocurrencies, memecoins, non-fungible tokens, and stablecoins “180 days prior to and 2 years after” an individual’s time in office. This legislation specifically targets payment stablecoins, which WLF announced in March. In May, an Abu Dhabi-based company expressed its intention to use the stablecoin to settle a $2 billion investment in Binance. The president’s family has reportedly reduced its stake in WLF to 40% in June from 75% in December, with proceeds from potential sales estimated at millions of dollars. The nonpartisan organization State Democracy Defenders Action reported in April that the president’s digital assets holdings were worth $2.9 billion, accounting for roughly 40% of his wealth.

Schiff’s proposed bill is one of the first legislative efforts in the Senate to address Trump’s ties to the crypto industry. In the House of Representatives, California Congresswoman Maxine Waters introduced the Stop Trading, Retention, and Unfair Market Payoffs, or TRUMP, in Crypto Act. This bill aims to block Trump’s memecoin and stop his crypto corruption. It is unclear whether either bill will gain enough support to pass, given that Democrats are currently in the minority in both the House and Senate. Even if the legislation were to pass both chambers, it would likely face a veto from Trump and require a two-thirds vote in both chambers to override it and become law.

The introduction of these bills reflects a growing concern among Democrats about the influence of cryptocurrency on public officials and the potential risks it poses to the financial system. The legislation seeks to prevent public officials from using their positions to gain unfair advantages in the crypto market, thereby protecting the integrity of the financial system and the interests of American investors. The bill introduced by Schiff is part of a broader legislative push to address the cryptocurrency ties of senior government officials. At least four other bills have been proposed with similar objectives, highlighting the bipartisan concern over the potential for conflicts of interest in the crypto industry.

These legislative efforts underscore the need for greater oversight and regulation in the rapidly evolving world of cryptocurrency, where the involvement of high-ranking officials can have significant implications for market stability and investor confidence. The proposed legislation comes at a time when the cryptocurrency market is facing increased scrutiny from regulators and lawmakers. The volatility and speculative nature of cryptocurrencies have raised concerns about their suitability as retirement investment tools. In response to these concerns, four Democratic senators recently wrote to the Department of Labor, urging it to reconsider its decision to withdraw guidance cautioning employers against including cryptocurrency in 401(k) retirement plans. The senators expressed strong concern that rescinding the prior warning removes essential protections for American workers' retirement savings, citing the potential for price volatility and scams.

The senators' letter highlighted the dramatic swings in the value of bitcoin, which has ranged from less than $17,000 to more than $111,000 in just five years. They also cited a recent 10% plunge in bitcoin's value following Trump's April announcement of new tariffs, arguing that this underscores the sensitivity of cryptocurrencies to global policy shifts. The senators emphasized the need for certainty in retirement investment accounts, stating that the cryptocurrency market's volatility makes it unfit to serve as a retirement investment tool.

The involvement of corporations with ties to the president or his family in various aspects of the cryptocurrency industry, including the issuance of memecoins and dollar-backed stablecoins, as well as bitcoin mining, has further fueled concerns about potential conflicts of interest. The proposed legislation aims to address these issues by establishing clear guidelines and restrictions on the involvement of public officials in the crypto sector, thereby protecting the integrity of the financial system and the interests of American investors.