Trump's Crypto Ties Spark Conflict of Interest Concerns in Congress

During a recent House Financial Services Committee hearing, Representative Maxine Waters expressed strong concerns about President Donald Trump's involvement in the cryptocurrency sector, particularly his ties to a stablecoin backed by his family. Waters accused Trump of leveraging his political influence to profit from various crypto ventures, including the launch of a US dollar-pegged stablecoin by World Liberty Financial (WLFI), a company supported by Trump’s family. She warned that the stablecoin legislation under discussion could enable financial conflicts of interest, potentially allowing Trump to embed his stablecoin in government systems, from social security payments to tax collection, thereby putting national financial stability at risk.

Waters argued that Trump and his associates were using the regulatory process to enrich themselves through “multiple crypto schemes.” She specifically mentioned Trump’s previously launched meme coin and his reported ambitions to create a national cryptocurrency stockpile as part of a larger plan to replace the US dollar with his own digital currency. Other lawmakers and experts also raised questions about potential conflicts of interest stemming from Trump’s crypto activities. Committee Chair French Hill acknowledged that the Trump family’s involvement in the crypto sector complicates efforts to draft effective legislation. Waters declared that she will oppose the bill unless it includes provisions to prevent a sitting president from owning a stablecoin business, and urged her colleagues not to enable these kinds of conflicts.

Meanwhile, Representative Bryan Steil, who introduced the STABLE Act, focused on the need to establish clear consumer protections and did not immediately address the specific concerns raised about Trump’s stablecoin. The committee also reviewed amendments to the STABLE Act alongside other legislative proposals aimed at curbing illicit financial activity and preventing the issuance of a US central bank digital currency. The markup hearing was a crucial step in determining whether the bills will advance to a full vote in the House of Representatives.

Senator Elizabeth Warren and Representative Maxine Waters also urged the acting chair of the US Securities and Exchange Commission (SEC), Mark Uyeda, to preserve records related to World Liberty Financial (WLFI). In a letter, the two Democratic lawmakers raised concerns over what they described as an “unprecedented conflict of interest,” suggesting that Trump’s financial ties to WLFI could influence regulatory decisions in favor of the crypto industry. They argued that this financial relationship may incentivize the Trump administration to pressure federal agencies, including the SEC, to adopt policies that directly benefit Trump’s crypto ventures.

The letter followed WLFI’s announcement that it launched a stablecoin, USD1, on both the BNB Chain and Ethereum blockchain. The lawmakers referenced this launch along with Trump’s recent cryptocurrency-related initiatives, including the creation of a national cryptocurrency stockpile and the release of the TRUMP meme coin, as examples of potential conflicts of interest. Warren and Waters emphasized that the American public deserves transparency regarding whether the SEC is acting independently or being influenced by the financial interests of the president’s family. They called on Uyeda to preserve all communications and documents between Trump, his family, and the SEC, as well as any records involving WLFI.

The letter also drew attention to some of the recent changes at the SEC under Trump’s administration. Since appointing Uyeda as acting chair, the SEC reportedly dropped several investigations and enforcement actions against crypto firms, including some whose executives contributed to Trump’s 2024 presidential campaign. Trump’s nominee to permanently lead the SEC, Paul Atkins, is set to face a Senate Banking Committee vote, with a full Senate confirmation to follow if approved.

In other news, President Trump signed an executive order imposing sweeping tariffs on imports in a move aimed at reshaping the US economic framework. The order establishes a 10% baseline tariff on all imports from every country and introduces reciprocal tariffs based on the rates US goods face abroad. Under this policy, the US will levy tariffs equal to roughly half the amount trading partners charge on American imports. For instance, since China imposes a 67% tariff on US products, the US will now place a 34% tariff on Chinese goods. Additionally, a flat 25% tariff has been introduced on all automobile imports.

In announcing the order, Trump framed the tariffs as a return to a historic model of economic protectionism, and even suggested that the US experienced its greatest prosperity when it relied on tariff revenue rather than income tax. He specifically referenced the period from 1789 to 1913, and claimed that the country was wealthier and more economically secure before the introduction of the federal income tax. Trump also revived a proposal from his 2024 campaign to abolish the Internal Revenue Service (IRS) and replace federal revenue collection with tariffs alone. He argued that such a shift will relieve American taxpayers and eliminate the need for income-based taxation.

Commerce Secretary Howard Lutnick, who assumed office in February, agreed with Trump’s stance, and endorsed the concept of an “External Revenue Service” funded by tariffs. Lutnick believes that tariff revenue will protect American workers and industries while reducing the financial burden on citizens, and argued that the current tax system demands too much from the public without delivering a balanced federal budget.