Author: Bright, Foresight News
On May 1, 2025, senior Democratic Senator Elizabeth Warren, along with five colleagues, sent a joint letter to Treasury Secretary Janet Yellen, sternly pointing out that the Trump administration's plan to include crypto assets in national strategic reserves "could pose a systemic threat to the stability of the U.S. financial system".
This 12-page letter not only lists risks such as cryptocurrency price volatility and regulatory arbitrage but also publicly questions the Trump family's interest transfer with the crypto industry for the first time - World Liberty Financial (WLFI), a crypto enterprise controlled by the Trump family, recently exposed that its stablecoin USD1 reached a $2 billion investment agreement with MGX, a venture capital firm supported by the Abu Dhabi government, with Trump family members holding a staggering 42% stake according to WLFI's disclosed shareholder list.
This is not the first time Democrats have targeted Trump's crypto policy. As early as April 29, Maxine Waters, the chief Democratic member of the House Financial Services Committee, successfully prevented the joint hearing of the Republican-led "Crypto Market Structure Act" on the grounds of "conflict of interest". In her letter to the committee chairman Hill, she directly stated: "When the Trump family gains hundreds of millions of dollars by issuing meme coins (TRUMP) and investing in DeFi projects, any bill attempting to relax regulation will become a money laundering tool."
The "Gene Confrontation" of Crypto Policies Between the Two Parties
Democrats: From "Financial Security" to "Political Settlement"
As a "crypto hawk" within the Democratic Party, Elizabeth Warren's stance can be traced back to 2017. At that time, the "Cryptocurrency Bill" she led aimed to bring 90% of crypto assets under securities regulation, requiring exchanges to register with the SEC and disclose user information. This proposition was further upgraded in the 2025 joint letter, where she proposed limiting the scale of cryptocurrency reserves to 0.5% of federal assets and mandatorily requiring reserve assets to be held in compliant stablecoins like USDC.
House Financial Services Committee Democratic leader Stephanie Murphy focused on the "national security" issue. In the congressional hearing on April 30, she presented FBI investigation data: money laundering transactions through cryptocurrencies increased by 370% year-on-year in 2024, with 62% involving Russian oligarchs and Middle Eastern terrorist organizations. "When the Trump family conducts crypto transactions with Middle Eastern sovereign funds, we must be vigilant about whether this constitutes a new geopolitical risk," Murphy emphasized.
As the core infrastructure of the crypto ecosystem, stablecoins have become the focus of recent bipartisan negotiations. The Republican-led "GENIUS Act" attempted to establish a federal regulatory framework for stablecoin issuance, but Democrats suddenly turned against it on May 4, with 9 Democratic senators jointly opposing the current version and demanding enhanced anti-money laundering and foreign issuer review. This shift directly reduced the probability of the bill passing the Senate to 37%.
Republicans: From "Innovation Freedom" to "Strategic Layout"
In stark contrast to the Democrats, the Trump administration is systematically advancing the "strategization" of crypto assets. The executive order signed on January 24 established a digital asset working group led by AI and crypto commissioner, the "Crypto Tsar" David Sacks, requiring a report within 180 days that includes stablecoin regulatory frameworks and national crypto reserve standards. On March 6, Trump further signed an executive order announcing the inclusion of 200,000 bitcoins (approximately $18 billion) held by the federal government into national strategic reserves and exploring the inclusion of assets like XRP and SOL.
Behind this policy shift is the Republican Party's far-reaching layout for "digital dollar hegemony". Analysis by strategic consulting firm Rhodium Group indicates that Trump's new crypto policy attempts to migrate the settlement function of the dollar from the traditional banking system to the blockchain through a "stablecoin + on-chain assets" model, thereby avoiding geopolitical friction's impact on the dollar's status.
Trump's crypto policy developments directly influence market sentiment. On March 2, when the White House announced exploring crypto asset reserve possibilities, Bitcoin's price surged 12% within 24 hours, breaking the $95,000 mark. However, this optimistic sentiment did not last, and Bitcoin's price plummeted 8% on the day the Democratic joint letter was exposed on April 29, with market value evaporating over $200 billion. On-chain data shows that WLFI accumulated sales of 128,000 ETH (approximately $350 million) from March 1 to April 30, highly coinciding with market selling pressure peaks.
The Turbulent "Crypto Empire"
Eric Trump, as the operator of the family's crypto business, has his personal wealth deeply tied to the crypto industry. In addition to serving as an ambassador for World Liberty Financial, he also serves as an advisor to Japanese crypto giant Metaplanet and American Bitcoin mining company American Bitcoin, with a total annual salary exceeding $20 million.
This conflict of interest has sparked strong dissatisfaction among Democrats. Warren directly stated in the joint letter: "When Eric Trump promotes the Dubai crypto tower at the Token2049 summit, he is essentially using the presidential family's political capital for financial harvesting." The American center-left oversight organization Accountable.US called the Trump coin ranking plan "the most blatant presidential corruption and wealth accumulation scheme in U.S. history", believing it would open doors for wealthy donors to access the U.S. president and facilitate the Trump family's personal enrichment.
According to OpenSecrets data, the crypto industry donated over $120 million to federal political candidates in 2024, with 78% flowing to the Republican Party. Top enterprises like Coinbase have donated $35 million to the Trump campaign team through PACs (Political Action Committees) in exchange for policy support. This "money politics" has intensified Democratic vigilance. Congressman Brad Sherman presented evidence at the hearing that WLFI's investors include Saudi sovereign wealth funds and Russian oligarchs, and these funds might launder money through crypto transactions.
Silicon Valley tech giants and Wall Street "old money" are showing a split in this contest. BlackRock CEO Larry Fink publicly supports Trump's crypto reserve plan, calling Bitcoin "digital gold against fiscal deficits". However, famous economist and gold bull Peter Schiff insists that "U.S. stock index futures and the dollar are both facing sell-offs. But gold and Bitcoin are showing completely opposite trends. Gold is performing like a safe-haven asset, rising about 1%. Bitcoin's trading performance looks like a risk asset, falling about 2%. Clearly, Bitcoin is not digital gold."
Currently, the U.S. Congress has three key bills: the Republican-led Crypto Market Structure Act, the Democratic Crypto Consumer Protection Act, and the bipartisan Stablecoin Regulatory Framework. Analysts point out that if Trump fails to push through at least one bill before November 2025, the crypto industry will face the risk of a "regulatory vacuum".
May 6th is the deadline for the White House's order to establish a strategic Bitcoin reserve and U.S. digital asset reserve, requiring the Treasury Secretary to submit an assessment report within 60 days. Will the Trump administration be able to submit this "homework" on time?
