Democrats Are Joining Republicans On Trump’s Alarming Crypto Agenda | Opinion #CriptoNews

In a short span, the Trump administration has already fomented multiple crises and the public has taken notice. His party’s electeds have faced tough questions away from Washington, even in deeply red seats. Meanwhile, the Democratic Party’s base is increasingly upset at their own party leadership’s inaction in the face of the Trump administration’s all-out assault on everyday people.

What the moment calls for is a Democratic congressional delegation eager to wholeheartedly oppose Trump and billionaire Elon Musk. Despite this, some congressional Democrats have deemed it prudent to work with the Trump administration to pass sweetheart legislation specifically enriching one industry that funded the Republican Party’s surge to power—cryptocurrency.

Last Wednesday, the Senate Banking Subcommittee on Digital Assets held a hearing to discuss bipartisan cryptocurrency legislation. At the hearing, Chair of the Subcommittee Senator Cynthia Lummis (R-Wyo.) said she intended to pass two major pieces of cryptocurrency legislation this year. The expectation is that the first, which would focus on stable coins—crypto tokens pegged to the dollar—should be an easier lift, but the senator’s broader goal is to address the digital asset market in its entirety.

It’s a long-term industry goal; there have been multiple congressional efforts to rubber stamp industry-sponsored legislation. Now with Republican majorities in both legislative branches, the industry only requires seven Senate Democrats to accomplish their goal. And it seems that the industry’s deep influence campaign has effectively convinced a consequential number of Democrats to bear their cross. Among them are the Ranking Member of the Senate Banking Subcommittee on Digital Assets Ruben Gallego (who boasts the support of Silicon Valley billionaire investor and quasi-fascist Marc Andreessen), Senator Kirsten Gillibrand, Senator Angela Alsobrooks, and even Senate Minority Leader Chuck Schumer.

In the House there are even more, with Representative Ritchie Torres being amongst the most industry friendly. The congressman represents the poorest congressional district in America, but has long prioritized crypto’s interests, even after the checks from Sam Bankman-Fried dried up. On Monday, Torres joined Republican Majority Whip Tom Emmer to announce the creation of a Congressional Crypto Caucus.

While these Democrats embrace their Republican colleagues, the cryptocurrency industry has been completely unshackled by the Trump administration. Just days before his inauguration, Donald Trump released a meme coin, inviting supporters to purchase a Trump-branded token with no underlying value. The only utility it has shown so far? Helping a Chinese cryptocurrency investor avoid prosecution for fraud.

In the six weeks since, Trump hatchet man Elon Musk (himself a major cryptocurrency investor) has wielded his “agency”—named after a meme coin– against the SEC, CFTC, and CFPB demolishing the agencies with the authority to rein in cryptocurrency’s worst abuses. The Trump SEC has ended its cases against crypto firms Binance, Coinbase, and Consensys, among others. It also determined that meme coins are collectibles that do not fall under their oversight regime.

Just this past weekend, Trump announced his intention to create a “strategic” government reserve of cryptocurrencies. This will undoubtedly also be modeled after legislation introduced by Senator Lummis, who authored a bill to create a “strategic bitcoin reserve” last summer. Simply, this effort is a taxpayer-funded inflation of cryptocurrency asset prices, and the ensuing “fund” will—if based on Lummis’ legislation—just hold the assets in storage for decades rather than buy and sell them strategically.

Undeterred, Senate Democrats joined Republicans on Tuesday in an effort to overturn a Biden-era IRS rule which would have required cryptocurrency brokers to provide tax information similar to what stock brokers are required to provide the IRS.

Despite these unprecedented giveaways to the industry, Democrats appear eager to cooperate on even more industry-friendly policies. This is a mistake. The Trump administration has already announced it will not enforce existing rules on money laundering while ending enforcement of securities law. This makes any concessions congressional Democrats may be able to obtain from their Republican colleagues worthless. With an executive actively dismantling the agencies tasked with enforcing the law, any Democratic collaboration on the cryptocurrency project is an endorsement of these extreme actions.

Even more worrying, helping pass this legislation would expose millions of retail investors to the unpredictable risks of the crypto market like never before, while destabilizing the banking industry that the country relies upon. For its entire existence, cryptocurrency has existed in a somewhat parallel financial system, separated from the traditional one that most Americans are used to. By bringing cryptocurrency inside the system, the well-known volatility of cryptocurrency ceases to become an issue for just cryptocurrency investors—it becomes an issue for everyone.

Two years ago, there was a short-lived banking crisis that toppled Silicon Valley Bank, Silvergate Bank, and Signature Bank. All three were favored banks of crypto. Rather than learning from this lesson, the Trump administration, with its Democratic allies, intends on making this the norm, encouraging larger banks, public pension funds, and everyday investors to get involved with cryptocurrency. All with weaker enforcement than ever before.

Democrats should be in full-throated opposition mode. Instead of thwarting Trump’s fabrication of the next financial crash, they’re ensuring their fingerprints are on the ticking bomb as well.

Henry Burke is a senior researcher at The Revolving Door Project, where he researches issues pertaining to cryptocurrency, financial regulation, corporate influence, and economic media.

The views expressed in this article are the writer’s own.