TLDR
Democrat lawmaker Gerald Connolly calls on Treasury to stop Trump’s crypto reserve plans
Connolly cites conflict of interest with Trump’s crypto holdings and World Liberty Financial stake
White House claims Digital Asset Stockpile will only use forfeited cryptocurrency
Trump’s $TRUMP memecoin has reportedly generated $100 million in trading fees
Critics, including a Federal Reserve official, have called the reserve plan “the dumbest idea ever”
A Democrat lawmaker has demanded the US Treasury prevent the Trump administration from pursuing plans to create a strategic cryptocurrency reserve.
Representative Gerald E. Connolly of Virginia has sent a letter to Treasury Secretary Scott Bessent urging him to “cease all attempts” to create the reserve.
In his March 13 letter, Connolly expressed concerns about President Trump’s potential conflicts of interest. He cited the president’s connections to crypto ventures and alleged that the reserve would enrich Trump and his donors rather than benefit the American people.
“Such a reserve provides no discernible benefit to the American people but would enrich the President and his donors,” wrote Connolly in the letter.
The Trump administration has announced two separate cryptocurrency initiatives. The Digital Asset Stockpile will hold cryptocurrency that has been seized from criminal enterprises. The Strategic Bitcoin Reserve will make acquisitions through methods the White House claims are budget-neutral.
President Trump announced on March 2 via Truth Social that the cryptocurrency reserve would include five digital assets: Bitcoin (BTC), Ethereum (ETH), XRP, Solana (SOL), and Cardano (ADA). This announcement was part of his January 23 Executive Order titled “Strengthening American Leadership in Digital Financial Technology.”
Reserve Called “Dumbest Idea Ever”
Connolly referenced a Federal Reserve official who described the plan as “the dumbest idea ever.” The lawmaker argued that no strategic need exists for investing in what he called “the volatile and speculative cryptocurrency market.”
“A digital currency reserve would be nothing more than a highly speculative taxpayer-backed hedge to provide bitcoin speculators the assurance that when the crash comes, the State will deploy this fund to rescue it,”
Connolly stated in his letter.
The congressman noted that the United States has historically created reserves of certain commodities of strategic value, such as petroleum, through acts of Congress and usually during times of economic crisis.
Trump’s Crypto Connections Questioned
In his letter, Connolly highlighted several connections between Trump and cryptocurrency ventures. He pointed to the Trump Organization’s ownership in World Liberty Financial, a crypto venture that “aspires to be a sort of digital asset bank.”
The lawmaker also mentioned that both Eric Trump and Donald Trump Jr. have promoted cryptocurrencies. Donald Trump Jr. has described World Liberty Financial as “the future of finance.”
Connolly also raised concerns about the $TRUMP memecoin launched on January 17. He called it a “money grab” that has allowed Trump-linked entities to cash in on over $100 million worth of trading fees.
“In a set up that one cryptocurrency expert called ‘completely abnormal,’ two LLCs affiliated with the Trump organization own the vast majority of the coins,” Connolly wrote.
Administration Officials’ Crypto Ties
The letter also mentioned cryptocurrency connections of Trump administration officials. This includes David Sacks, the administration’s artificial intelligence and crypto czar, who remains a partner at Craft Ventures, which invests in a cryptocurrency index fund manager.
Elon Musk, Trump’s largest campaign donor, was also mentioned as holding crypto assets. Connolly noted that Musk named the Department of Government Efficiency (DOGE) after Dogecoin, a cryptocurrency Musk has promoted.
“The activities of DOGE throughout the federal government give Mr. Musk influence over the agencies that regulate the cryptocurrency industry,” Connolly wrote.
Request for Documents and Information
Connolly has requested a briefing for the Committee on Oversight and Government Reform. He also asked for several documents by March 27, including:
Communications regarding the creation of a strategic cryptocurrency reserve
A list of steps taken to address conflicts of interest
A list of companies connected to the cryptocurrency industry in which Treasury officials have interests
Information on safeguards against government officials benefiting from the reserve
Documents related to the selection criteria for digital assets in the reserve
Similar Criticisms from Other Democrats
Connolly is not the first Democrat to criticize Trump’s cryptocurrency endeavors. Representative Maxine Waters, a Democrat on the House Financial Services Committee, previously criticized Trump’s memecoin on January 20, comparing it to a “rug pull” and claiming the launch represented the “worst of crypto.”
The White House has defended its plans, stating that the Digital Asset Stockpile will only hold cryptocurrency already forfeited from criminal enterprises, while the Bitcoin reserve will only make acquisitions through budget-neutral strategies that won’t impact taxpayers.
Trump had not yet responded directly to Connolly’s letter as of the time of publication.
