House Democrats walked out of the US crypto hearing on Tuesday in protest of President Trump’s involvement in cryptocurrency, which made the whole hearing chaotic. The procedural joint session meant to assess the draft law of the United States on digital asset regulation turned into a partisan fight over deep political disagreements.

Key-Takeaways:

• In protest against Trump’s crypto ventures, led by Democrats Maxine Waters, Democrats walked out in protest over crypto venture discussions and blocking of discussions on digital asset regulation. 
• Republicans eventually continued the hearing, and instead focused on a bill to move crypto oversight to the CFTC. Straining bipartisan support, Waters introduced legislation that banned top officials from owning crypto.

Democrats Protest to Trump’s Crypto Ventures

Representative Maxine Waters blocked the unanimous consent to continue on the Republican proposed US Crypto Hearing. The reason for the walkout, according to her, was President Trump’s crypto ties.

The hearing left several Democratic lawmakers joining Waters. They also had a separate discussion about what they dubbed ‘Trump’s crypto corruption.’

The protest of the US Crypto hearing arose because of the family’s involvement in a crypto venture while in office. It also involves Bitcoin mining as well as some memecoins such as a stablecoin (USD1).

Democrats sounded alarms over a recent proposal to give top investors in Trump’s memecoin some sort of reward. Top 25 holders receive a private White House tour, as well as a gala dinner at Trump National Golf Club.

Republicans’ Response and Focus on Legislation

A US Crypto hearing roundup continued, however, as Republicans held the hearing as a “roundtable.” However, they shifted their focus to a draft bill on digital asset regulation.

It also would give regulatory authority to the CFTC. Instead, it can apply to most cryptocurrencies, not the SEC.

Democrats walking out of US Crypto Hearing drew criticism from Representative Bryan Steil. The differing policies have burned up important regulation time, he argued.

The national risk cannot be avoided by avoiding regulation, Steil said. His emphasis was on doing something rather than ‘putting our head in the sand.’

At the US Crypto Hearing, the market structure bill was voiced by the industry representatives in strong support. It also would have given much needed regulatory clarity, they argued.

‘Issuers of digital assets aren’t trying to work outside the law’, says James Rathmell of Haun Ventures. However, the current laws fail to take into account the nature of crypto markets.

Following the US Crypto Hearing, experts critical of the Republican led bill appeared on Waters’ competing session. The FIT21 2.0 bill has also been criticized by Chastity Murphy, a research fellow at the University of Manchester, for potentially “letting crypto firms self certify their tokens as decentralized and eliminating SEC oversight.”

In direct defiance of the controversial US Crypto Hearing, Waters released draft legislation that would ban the president, vice president, members of Congress, and all of their immediate family members from owning crypto assets, serving as officers or directors at crypto issuers, or receiving financial benefit from issuing or promoting crypto assets.

Waters said the protest was also meant to spur language in pending crypto bills to prohibit presidents from owning crypto holdings while in office. Trump’s actions have gone beyond the ethical lines, she said.

Finalizing a stablecoin bill is something that lawmakers were close to finishing, Waters highlighted. Trump has used his position to enrich himself and lure investors into buying into his ability to make them rich with access to the White House, she alleged.

Indications for Bipartisan Crypto Legislation

Escalating tensions have put the already tenuous bipartisan support for pending US cryptocurrency legislation on the knife’s edge, and the contentious US Crypto Hearing is no exception. 

Earlier this month, directly addressing Trump’s ventures, Representative French Hill, an Arkansas Republican, admitted that ‘the president’s portfolio of activities in the crypto space has complicated the process of getting a stablecoin law passed.’

A few Democrats at the roundtable reiterated their concern, however. Trump’s crypto ties were damaging the credibility of the industry, Representative Stephen Lynch warned.

Senate Republicans are moving on the GENIUS Act nonetheless, poised to vote on it Thursday despite increasing opposition. The bill targets regulation of stablecoins backed by one dollar.

Conclusion

The US Crypto Hearing is a chaotic day that encapsulates the pressure points for crypto regulation, bares the deepening political split and concerns by the president’s business tie. Comprehensive legislation now seems increasingly possible.