House Oversight Democrats are encouraging President Trump to abandon his plans for a crypto reserve, calling it a strategy to enrich himself at taxpayer expense.
The reserve, announced by Trump last week as both a strategic bitcoin reserve and “digital asset stockpile” for other forms of digital currency, would be akin to other reserves and stockpiles managed by the government, such as those for gasoline, food, and gold.
But Trump has heavily invested in cryptocurrency, including in a platform for buying various cryptocurrencies as well as launching his own meme coin.
“Such a reserve provides no discernible benefit to the American people but would significantly enrich the President and his donors. It would also constitute unsound fiscal policy by picking winners among currencies via social media and wasting taxpayer dollars,” Rep. Gerry Connolly (Va.), the top Democrat on the Oversight Committee, wrote in a letter to Treasury Secretary Scott Bessent.
“The creation of a strategic cryptocurrency reserve is poised to enrich the President and his closest allies at the expense of American taxpayers.”
The letter asks for any efforts by the Trump administration to account for the conflicts of interest of Trump as well as other administration officials heavily invested in digital currency.
It also asks for all documents and communications about the reserves and a “detailed list of safeguards that are in place to protect against government officials financially benefiting from the strategic cryptocurrency reserve.”
Connolly pegged the idea as one that would help provide assurances to digital currency speculators that the government would intervene if the market crashes.
“The United States has historically, through acts of Congress, created reserves of certain commodities of strategic value, such as petroleum, particularly during times of economic crisis. However, no strategic need has arisen that would necessitate investment in the volatile and speculative cryptocurrency market,” he wrote.
The letter points to a podcast interview with Chamber Of Digital Commerce leader Perianne Boring, who said when she raised the idea with Federal Reserve officials, one of them described it as “the dumbest idea ever.”
The Trump administration has defended its crypto reserve plan, saying it would be filled only with assets forfeited in criminal or civil proceedings.
Trump’s crypto and artificial intelligence (AI) czar, David Sacks, emphasized the plan will “not cost taxpayers a dime.”
“The U.S. will not sell any bitcoin deposited into the Reserve. It will be kept as a store of value,” Sacks wrote in a post on the social platform X. “The Reserve is like a digital Fort Knox for the cryptocurrency often called ‘digital gold.’”
While initially skeptical of digital currency, Trump has since vowed to make the United States the “crypto capital of the planet” and put an end to what he calls the “unlawful and unAmerican crypto crackdown.”
It’s a pivot that comes as the Trump family has gotten more involved in the sector themselves.
Trump has promoted World Liberty Financial, and during a September event alongside his sons, executives for the company said some tokens would be reserved for the family.
A photo of Trump is featured prominently on World Liberty Financial’s site, and he and his sons are listed as members of the team, even though a disclaimer later says they are not employees or officers there and that the company is “not political and not part of any political campaign.”
Nonetheless, the disclaimer adds that “affiliates, including Donald J. Trump has or may receive approximately 22.5 billion tokens from World Liberty Financial, and will be entitled to receive 75% of net protocol revenues.”
And just days before the Inauguration, Trump launched $Trump meme coin, while Melania Trump announced another meme coin for her, dubbed $MELANIA.
Meme coins are cryptocurrencies that are usually based on internet trends and start with no inherent value. Their value can surge when there is a high demand, making them a highly volatile asset.
Miranda Nazzaro contributed.
