Planned Crypto Hearing in U.S. House Derailed by Democrat Revolt

Democrats in the U.S. House of Representatives derailed what was supposed to be a joint hearing on crypto policy efforts on Tuesday, insisting that President Donald Trump's personal crypto dealings were too urgent to allow other discussion on instituting industry regulations.

"I object to this joint hearing because of the corruption of the president of the United States and his ownership of crypto and his oversight of all the agencies," said Maxine Waters, the ranking Democrat on the House Financial Services Committee, effectively robbing the gathering of its official status that required unanimous consent to proceed with the panel's joint hearing alongside the House Agriculture Committee.

Waters issued an invitation for people to come join the Democrats in another room "to discuss what we should be discussing: Trump's crypto corruption.

With raised voices speaking over each other at the start of the aborted hearing, Democrats insisted to their Republican counterparts that the president's digital assets ties — including his own memecoin and connections to World Liberty Financial — needed to be dealt with. Republicans, having introduced a discussion draft this week on proposed language for a crypto market structure bill, were left to continue a discussion with the witnesses they'd invited.

So, two non-hearings progressed on Tuesday morning in separate rooms, illustrating the sharpening divide between the parties this week on how to move forward on overseeing the digital assets sector.

"A joint hearing has been very, very needed," said a visibly frustrated Representative French Hill, the Republican chairman of the House Financial Services Committee. "I understand the ranking member has concerns, but by objecting to this hearing the ranking member is undermining the opportunity for these two committees to engage in a conversation of vital importance to the American people. That's a loss for our committee, the House and the public at large."

At what had technically become a "roundtable" in which the guests were participants, not witnesses, the Republican-driven discussion continued, with former Commodity Futures and Trading Commission Chairman Rostin Behnam arguing the agency needs more authority and funding to occupy a leading role in regulating crypto and Coinbase executive Greg Tusar called the market structure bill a "strong step" toward clarity for the industry.

In the Democrats' hastily organized meeting, Waters opened with another blast at her opposition."Since the Republican majority refused to do its job, I'm hosting today's roundtable to shed light on these critical issues before it's too late," she said. And Democrats were ready to discuss their own piece of legislation: an effort to ban top government officials from involvement in crypto assets or businesses

Chastity Murphy, a former aide to Rep. Rashida Tlaib who worked on stablecoin legislation and now a visiting fellow at the University of Manchester, argued in the Democrats' hearing that not prohibiting lawmakers from holding crypto assets or firms engaging in this kind of business is legalizing "holding public office for profit." In Trump's case, not prohibiting his crypto activities also means letting him determine which regulations could be helpful for his bottom line.

Also on Tuesday, Senator Chris Murphy, a Connecticut Democrat, introduced a bill to ban senior public officials from backing financial assets, including crypto.

Read More: Leading House Dem Will Block Crypto Market Structure Bill Hearing

Nikhilesh De contributed reporting.