Democrats urged the U.S. Treasury to “stop all attempts” to establish a strategic crypto sanctuary in the United States.
Michigan Rep. Gerald E. Connolly criticized the “cryptocurrency reserve” in a March 13 letter to Treasury Secretary Scott Bescent, saying it “does not provide identifiable benefits to the American people,” and instead would enrich the president and his donors significantly.
Connolly, who did not identify between strategic Bitcoin reserves and digital assets stockpile, said Trump’s plans constitute “unsound fiscal policy” because they choose a specific cryptocurrency over others via social media.
Connolly said the Trump administration’s plans would also waste taxpayer dollars on what the Federal Reserve described as “the stupidest idea ever.”
“There was no strategic need to invest in the volatile and speculative cryptocurrency market,” Connolly, a ranking Democrat on the House Committee on Surveillance and Government Reform, said in the letter.
“(That) would be nothing more than a highly speculative taxpayer-supported hedge to provide Bitcoin speculators with assurances that they will deploy this fund and rescue it in the event of a crash drop.”
A letter to Democrat Gerald E. Connolly’s Treasury Secretary Scott Bescent. sauce: US Surveillance and Government Reform Democratic Committee
However, the White House says it will only hold cryptocurrencies that have already been confiscated. At the same time, Bitcoin (BTC) Reserves will only acquire through budget-neutral strategies that do not affect taxpayers.
Connolly also said Trump had not discussed with Congress over the Bitcoin spare plan, not to mention getting permission from Congress to create it.
Connolly also argued that there was a conflict of interest between Trump’s presidential duties and the ownership of World Liberty Financial, the Trump agency’s crypto platform.
Democrats called the Trump token “a grab for money,” allowing them to pay transaction fees of more than $100 million.
This is called Trump’s “the most lucrative and rich scheme ever,” Connolly added.
Related: Bitcoin Reserve could become a “strong political weapon” – Arthur Hayes
Maxine Waters, a Democrat on the House Financial Services Committee, also criticized Trump’s Mimecoin on January 20, referring to the rug pull, claiming the launch represents “the worst code.”
Connolly urged Bescent to provide documents and communications related to the creation of the Bitcoin Reserve, and to provide a complete list of measures the Trump administration has taken to avoid conflicts of interest.
Connolly also sought a list of companies whose Treasury has crypto-related economic benefits. He asked again:
“Have you reviewed financial disclosures by the executive authority, including, but not limited to, Elon Musk, been tasked with developing a federal regulatory framework that governs cryptocurrency reserves?
Strategic Bitcoin Reserves use cryptocurrencies that were initially confiscated in federal criminal or civil cases. Meanwhile, digital assets stockpile consists of non-Bitcoin cryptocurrencies, including XRP (XRP), solana (Sol), Cardano (ADA), and Ether (ETH).
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