Democracy Defenders Action demands immediate action during markup to prevent officials from regulating markets in which they hold financial stakes.

WASHINGTON, D.C.—Lawmakers on the Senate Banking Committee have the opportunity to strengthen the regulatory framework for crypto markets, also known as the CLARITY Act, at an upcoming markup hearing scheduled on May 14. Ahead of the hearing, Democracy Defenders Action submitted a letter to the Committee last Friday, calling for immediate action to address urgent and unresolved conflicts of interest in government oversight of the crypto industry. The letter argues that the committee markup, scheduled for this Thursday at 10:30 a.m., will be the strongest opportunity to insert ethics safeguards, warning that failure to act before the legislation reaches the Senate floor could permanently weaken the integrity of the final framework.

The experts urge three specific recommendations:

1. Ban the president, vice president, members of Congress, senior administration officials, Supreme Court justices, and federal judges—and their spouses and dependent children—from owning or trading cryptocurrency, or from owning a company that issues cryptocurrency and crypto products.

2. Require all senior officials to report any cryptocurrency transactions or holdings from any source in any public financial disclosures they file, including those required under the Ethics in Government Act and the STOCK Act. 

3.  Create a clear and comprehensive criminal crypto anticorruption enforcement system that empowers independent supervising ethics bodies to investigate, review, and enforce divestment and disclosure requirements, and impose meaningful penalties that serve as a true deterrent for non-compliance.

With Congress on the verge of defining the rules for a rapidly expanding crypto economy, it is imperative that effective ethics rules are adopted or else those rules risk being taken advantage of by public officials who are able to benefit financially from the industry they regulate. Trump’s expanding crypto business empire, in particular, has created unprecedented ethics concerns as his administration simultaneously shapes the rules, enforcement and market structure of an industry from which his family has reportedly gained billions in value, including from foreign-linked investments that pose corruption and national security risks.

The letter states: “This risk is most acute with the president. As our sister organization DDF has detailed in several comprehensive reports released over the past year, President Trump and his family have earned roughly $1 billion in crypto revenue—mostly from foreign sources—and have built a crypto empire that is valued between $2.9 billion and $7.1 billion.”

“Officials should never be in a position to shape the rules of a market in which they or their families have a financial interest,” said Virginia Canter, chief counsel and director of ethics and anti-corruption at Democracy Defenders Action. “Divestment and clear prohibitions are the only way to eliminate that conflict.”

As DDA explains in the letter, the credibility of the new crypto regulatory system will depend on whether the Committee acts now to include strong anti-corruption safeguards before the legislation is finalized. Markup by the Senate Banking Committee is scheduled for May 14, 2026. Once out of committee, the bill will head to the floor.

Read the full letter here.

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