Top Democrat Urges Treasury to Cease Trump’s Plan for a Strategic Crypto Reserve

Highlights:

• Connolly urged the Treasury to stop creating a strategic crypto reserve in the U.S.
• He accused Trump of using Bitcoin policies to benefit himself and his financial backers.
• He criticized Trump’s crypto-linked projects, calling them a “money grab” scheme.

Top Democrat of the House Committee on Oversight and Government Reform Rep. Gerald Connolly criticized the “cryptocurrency reserve” in a Thursday letter to Treasury Secretary Scott Bessent. He said this initiative primarily benefits Trump and his financial backers rather than the American public.

Connolly called on the U.S. Treasury to “cease all attempts” to establish a strategic cryptocurrency reserve in the country. “Such a reserve provides no discernible benefit to the American people but would significantly enrich the President and his donors,” Connolly wrote.

NEW: RM @GerryConnolly sent a letter to @USTreasury Secretary Bessent urging the Department to cease all attempts to create a strategic cryptocurrency reserve, citing President Trump’s glaring conflicts of interest. https://t.co/EK106k15oF

— Oversight Committee Democrats (@OversightDems) March 13, 2025

He called the plan reckless, saying it would unfairly promote Bitcoin through social media hype and waste taxpayer money. Connolly also mentioned a Federal Reserve official who reportedly called it “the dumbest” idea ever. He added that there is no strategic need to invest in the volatile and speculative cryptocurrency market.

Connolly wrote:

“[It] would constitute nothing more than a highly speculative taxpayer-backed hedge to provide bitcoin speculators the assurance that when the crash comes, the State will deploy this fund to rescue it.”

Trump’s executive order, signed earlier this month, instructs the federal government to create a strategic Bitcoin reserve. It will start with approximately 200,000 Bitcoin already held by the government. Also, the Bitcoin reserve will acquire assets using budget-neutral strategies. These methods will ensure no financial burden on taxpayers. The order also establishes the US Digital Asset Stockpile, a separate entity for managing forfeited cryptocurrencies like Ethereum, XRP, Solana, and Cardano.

Democrat Slams Trump’s Crypto Ties

Connolly accused Trump of bypassing Congress on the Bitcoin reserve plan without seeking approval. He also pointed out potential conflicts of interest involving Trump’s role as president and his ties to World Liberty Financial and the Official Trump (TRUMP) memecoin.

Trump-backed World Liberty Financial, launched last year, currently holds around $76 million in cryptocurrencies, down from nearly $380 million before multiple sell-offs. The project is also continuing to sell its WLFI tokens.

Moreover, the Democrat called the TRUMP token a “money grab,” saying it let Trump-linked entities earn over $100 million in trading fees. Connolly called it Donald Trump’s most profitable get-rich-quick scheme to date.

Connolly Demands Answers from Treasury on Crypto Reserve and Regulations

Connolly requested a list of companies where the Treasury has crypto-related financial interests. He also questioned whether the Presidential Working Group on Digital Asset Markets had reviewed the financial disclosures of administration officials. The group is responsible for developing a federal regulatory framework for the strategic crypto reserve. Connolly specifically mentioned Elon Musk in his inquiry.

He also urged the Treasury to outline actions taken by the Trump administration to address conflicts of interest. Additionally, he requested details on any safeguards in place. Connolly asked for a response by March 27.