Key Takeaways:
- Rep. Gerald Connolly urged the U.S. Treasury to halt plans for a strategic cryptocurrency reserve, citing conflicts of interest.
- Concerns arise over President Trump’s personal crypto holdings and financial ties to digital assets.
- The lack of congressional consultation adds to the controversy surrounding the proposed reserve.
Rep. Gerald Connolly, the top Democrat on the House Committee on Oversight and Government Reform, has called on the U.S. Treasury Department to abandon plans for a strategic cryptocurrency reserve.
His appeal follows President Donald Trump’s executive orders for the creation of the digital asset cache, including Bitcoin, Ethereum, XRP, Solana, and Cardano. Connolly was concerned that the program is primarily for Trump’s finances and not the public at large.
In a letter to Treasury Secretary Scott Bessent, Connolly criticized the move as wasteful use of taxpayer funds. He pointed to the reality that Trump, who previously referred to the use of cryptocurrencies as a “scam,” now stands to gain considerably by virtue of the accumulation.
The correspondence also referred to the administration’s inability to get congressional approval for the reserve, raising legal and ethical issues. It warned that choosing winners among the digital currencies due to the power of the presidency could destabilize the financial markets.
Financial Conflicts and Political Tensions
The controversy is further deepened by the business interests Trump has in the crypto space. Trump’s involvement with World Liberty Financial, which is looking to become a bank for digital assets, was highlighted by Connolly.
The organization encourages the use of investing and lending in cryptocurrencies, making it therefore a direct beneficiary if the government-backed reserve bill is passed. Trump holds a major stake, and any spike in the prices of crypto can translate to massive personal gain for him.
Trump’s activities with the $TRUMP memecoin have also triggered further red flags. It is said that his groups have earned up to $100 million in trading fees on the token.
Critics argue that this is a conflict of interest because government policy would directly benefit Trump’s crypto-related earnings. Connolly warned that such policies could lead to undue market influence, undermining fair competition in the sector.
Congressional Scrutiny Intensifies Over Crypto Reserve
The refusal to consult with Congress is the sticking issue at the center of the controversy. Connolly reasserted that Trump’s administration proceeded with such crypto-related projects without consulting the legislature in violation of necessary checks and balances.
Due to the cost implications, Connolly asked for the full briefing to the staff of the Oversight Committee and wants to be formally replied to by March 27, 2025.
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