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Leadership within the US House Financial Services Committee (HFSC) appeared to struggle in reaching a consensus on how to oversee digital assets amidst President Donald Trump’s possible conflicts of interest with the sector.
During a hearing on June 4, committee ranking member Maxine Waters reaffirmed worries that, without clarity in the legislation, Trump could utilize the Digital Asset Market Clarity (CLARITY) Act to further “profit” from cryptocurrency.
The California representative referenced instances of the president hosting a dinner for his leading memecoin investors who reportedly spent about $148 million for the privilege to participate, suggesting that Trump might manipulate the market structure to “transfer [Americans’] funds into his digital wallet.”
“This hasty, overly intricate proposal will amplify investor risks, which are already widespread in today’s crypto landscape,” stated Waters, in reference to the proposed CLARITY Act.
“Numerous high-risk activities are overly shielded from the bill, leaving our constituents without recourse when their investments disappear. The proposal jeopardizes our national security and imposes no repercussions for crypto offenders.”
The CLARITY Act, introduced by Republicans with three Democratic co-sponsors on May 29, was characterized as a bipartisan initiative aimed at defining guidelines for the crypto sector.
Numerous Democratic legislators have called for inquiries into Trump’s affiliations with his family-associated crypto platform World Liberty Financial and his other digital asset investments as Congress deliberates on legislation to regulate payment stablecoins and set up a market structure framework.
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“At present, there is no federal framework for digital assets,” remarked HFSC Chair French Hill at the June 4 hearing. “The SEC [Securities and Exchange Commission] and CFTC [Commodity Futures Trading Commission] lack distinct jurisdictional lines over digital assets, resulting in uncertainty for investors and innovators that often hampers progress.”
“We currently cannot ascertain the extent to which the president is acting in America’s best interest or merely facilitating his personal gain,” stated Massad. “This is an issue we must confront. I don’t understand how we can progress and strive to create a framework for this sector without addressing this.”
In May, Waters proposed legislation to explicitly prevent the president, vice president, members of Congress, and their families from participating in the sector. The proposal coincided with the day Trump held his memecoin dinner at his golf club. Despite claims from the White House that the gathering was carried out “during his personal time,” Trump spoke from a podium adorned with the US presidential seal.
The House Agriculture Committee conducted a separate hearing on June 4 to discuss a digital asset framework. Ranking member Angie Craig mentioned Trump was complicating the efforts to advance crypto legislation “significantly,” pointing out the risk of using non-public information to gain from the sector, including through his memecoins.
Crypto bills under examination in the House and Senate
Both the Guiding and Establishing National Innovation for US Stablecoins, or GENIUS, Act to regulate payment stablecoins in the Senate and the market structure bill in the House may encounter ongoing resistance from Democrats and lawmakers averse to legislation lacking a specific exclusion to tackle Trump’s crypto connections. The GENIUS Act has already passed a vital vote in May, allowing it to be taken up by the full chamber, while the CLARITY Act remained under review by the House Financial Services Committee as of May 29.
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