Congress moves to ban officials from crypto holdings—but definition may be too broad
H.R. 3573 — Stop TRUMP in Crypto Act of 2025 · Filed by Maxine Waters (D-CA) · 32 cosponsors · Introduced May 21, 2025 · Referred to committee
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What it does
This bill prohibits the President, Vice President, Members of Congress, and their immediate family members from owning, trading, or profiting from cryptocurrency and digital assets while in office. It bars them from holding stakes that would let them control a digital asset, serving as officers or directors of crypto companies, receiving compensation from crypto activities, or trading crypto with insider information. The bill also closes loopholes by preventing these officials from hiding crypto ownership through trusts, shell companies, or other intermediaries.
Why we flagged it
The bill's core function is to prevent elected officials and their families from holding or profiting from digital assets while in office — a straightforward ethics/conflict-of-interest measure. However, the extremely expansive definition of 'digital asset' (including derivatives, staking products, and DeFi protocols) transforms it into a sweeping regulatory statement about what counts as a crypto asset, which extends well beyond the narrow conflict-of-interest purpose.
What the text implies
- The definition of 'digital asset' includes 'any financial contract or product or instrument that derives its value from a digital asset,' which could capture mainstream financial products (ETFs, mutual funds, insurance products) that have any crypto exposure, potentially restricting officials' ability to hold diversified retirement portfolios.
- The 'look-through requirement' and 'beneficial owner' definition (including 5% ownership thresholds and indirect control) may create enforcement nightmares: an official's spouse's family trust, a blind trust, or even passive index fund holdings could trigger violations if they contain crypto exposure.
The full analysis lists 5 implications of this text.
Who stands to gain
Traditional financial services firms (insurance, asset management) seeking to reduce crypto competit; Regulatory agencies (SEC, CFTC) gaining expanded enforcement authority over official conduct