Rep. Gerald E. Connolly, a ranking member of the House of Representatives Oversight and Government Reform Committee, urged the U.S. Treasury to abandon plans to establish strategic Bitcoin reserves and digital asset stockpiles.
In a letter to Treasury Secretary Scott Bescent, Connolly accused the efforts of being financially irresponsible and politically motivated. He warned that the initiative will not be in the clear public interest while enriching President Donald Trump and his allies significantly.
Trump’s Presidential Order
Connolly’s concerns stem from Trump’s March 6 executive order, establishing a strategic Bitcoin reserve and a US digital asset stockpile.
The initiative positions the federal government as the main owner of Bitcoin (BTC), Ethereum (ETH), XRP, Solana (SOL), and Cardano (ADA). Trump calls the move a way to solidify US domination on digital assets.
Connolly pointed to a sudden shift in Trump’s stance on cryptography, highlighting that he previously dismissed digital assets as “fraud” during his first term.
However, his administration is currently preparing to allocate federal funds to the sector. This is the approach that Connolly has been criticized for attempting to manipulate financial markets for political and personal gains.
He argued that the move amounts to selecting winners among digital currencies and creating artificial demand for assets Trump has financial exposure.
Conflict of interest
Ranking members outlined several potential conflicts of interest, including a reported Trump report from World Liberty Financial, a digital asset company intended to serve as a crypto-based lending and investment platform.
Connolly warned that government purchases of Crypto could directly benefit Trump’s financial holdings, particularly if the administration prioritizes assets consistent with his private investments.
He also pointed to Trump’s involvement in Trump Memocoin, whose value has skyrocketed based on speculation surrounding his political statements.
He pointed to reports that Trump-linked entities generated more than $100 million in transaction fees from tokens, raising concerns that the administration’s crypto initiative could further promote financial speculation linked to the president.
Lack of council oversight
Connolly also criticized the administration for bypassing Congress to create reserves, claiming that Trump had not sought legislation approval and had consulted with lawmakers about potential reserve risks or benefits.
He warned that without Congressional oversight, the initiative could be a tool for political influence rather than a legitimate financial strategy.
He also referenced skepticism from financial experts, citing a Federal Reserve official who reportedly described the plan as “the stupidest idea.”
Connolly urged the Treasury to immediately suspend all plans related to strategic cryptographic reserves. He had requested a full briefing from House Oversight Committee staff by March 27th, clarifying the legal justification of the reserve.
He also called for clarity on the process of acquiring and managing assets, its potential impact on the crypto market, and its financial ties between the White House and digital asset companies.
The Treasury has not yet responded to Connolly’s request. His letter has raised opposition from Congressional Democrats, who are increasingly scrutinizing Trump’s growing involvement in the digital assets industry.
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