Senator Schiff Introduces Bill to Ban Crypto Activities by Public Officials

Democratic 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 immediate family. The bill was introduced in response to Donald Trump's connections to the cryptocurrency industry, particularly his disclosure of $57.4 million in income tied 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, stating that the legislation is necessary to prevent the misuse of public office for personal financial gain. The proposed bill extends a prohibition on issuing, sponsoring, or endorsing various digital assets, including cryptocurrencies, memecoins, non-fungible tokens, and stablecoins. This prohibition would apply 180 days prior to and two years after an individual's time in office.

The bill specifically targets payment stablecoins, a type of cryptocurrency that is pegged to the value of a fiat currency, such as the US dollar. WLF announced its own USD1 stablecoin in March, and an Abu Dhabi-based company intended to use this 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.

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 on the same day the president held a dinner to reward the top holders of his memecoin. This act aims to block Trump’s memecoin and stop his crypto corruption.

It remains uncertain whether either bill will gain enough support to pass in their respective chambers. Even if Schiff’s or Waters’ legislation were to pass both the House and Senate, it would likely be vetoed by Trump and require a two-thirds vote in both chambers to override it and become law. Democrats are currently in the minority in both the House and Senate.

Schiff's bill is part of a broader effort to establish clear guidelines and restrictions on the involvement of senior government officials in the crypto sector. This initiative reflects a growing trend among lawmakers to address the potential conflicts of interest that arise from the intersection of politics and the rapidly evolving world of digital currencies. The legislation is one of several recent proposals aimed at regulating the cryptocurrency activities of government officials, with at least four other bills introduced with similar objectives.

These efforts underscore the increasing scrutiny that the crypto industry is facing from lawmakers, who are seeking to balance innovation with the need for transparency and accountability. Schiff's legislation represents a middle ground, seeking to strike a balance between encouraging technological advancement and safeguarding the integrity of the political system. The introduction of this bill also highlights the broader debate surrounding the regulation of cryptocurrencies in the United States, with some advocating for a more permissive approach to foster innovation and others arguing for stricter regulations to protect consumers and maintain financial stability.

In addition to the bill introduced by Schiff, other lawmakers have also been active in addressing the regulatory challenges posed by cryptocurrencies. For instance, Senator Bill Hagerty has proposed a stablecoin bill that aims to split regulatory oversight between state and federal agencies. This approach reflects a growing recognition of the need for a coordinated regulatory framework that can effectively address the complexities of the crypto industry.

The introduction of these bills underscores the evolving nature of the regulatory landscape for cryptocurrencies. As the industry continues to grow and attract more participants, lawmakers are increasingly focused on developing policies that can address the unique challenges and opportunities presented by digital currencies. The efforts by Schiff and other lawmakers to regulate the cryptocurrency activities of public officials are a significant step in this direction, reflecting a commitment to ensuring that the benefits of innovation are realized without compromising the integrity of the political system.