Legislative Efforts to Enhance Integrity in Cryptocurrency Dealings
In a significant move towards enhancing integrity in government dealings with cryptocurrencies, U.S. lawmakers are intensifying efforts to enact legislation aimed at curbing the ability of federal officials to engage in the digital assets market. Amid increasing scrutiny over potential conflicts of interest, Representative Jimmy Panetta (D-CA) revealed on July 16 his backing of two critical pieces of legislation designed to fortify ethical standards surrounding cryptocurrency activities among public officials.
Proposed Legislation
These proposed bills, the Modern Emoluments and Malfeasance Enforcement (MEME) Act spearheaded by Rep. Sam Liccardo, and the Stop TRUMP in Crypto Act championed by Rep. Maxine Waters, seek to prohibit high-ranking officials and their close relatives from endorsing, profiting from, or creating digital asset ventures during their tenure. Panetta articulated the rationale behind this legislative push:
“These bills would ban federal officials from promoting or profiting off crypto schemes while in office, just like we already expect when it comes to stocks or private businesses. That’s a basic step to restore some trust and make sure public office is used to serve the public, not enrich yourself.”
Concerns and Rationale
The urgency for such measures is underscored by rising concerns about former President Donald Trump’s connections to cryptocurrency projects, including the controversial TRUMP and MELANIA tokens and World Liberty Financial, which reportedly involves Trump family affiliations and has raised over $50 million for its founders. Additionally, the USD1 stablecoin, associated with the same network, has generated further apprehension due to potential foreign influence and transparency issues.
Support and Implications
Supporters of the MEME and Stop TRUMP Acts contend these laws aim to fill existing voids in the current ethical guidelines and adapt to the rapidly evolving landscape of digital finance. The MEME Act specifically targets high-ranking officials such as the President, Vice President, and Congressional members, forbidding them and their immediate families from engaging with any form of digital asset while serving in their official capacities. Violators of this legislation would face both criminal and civil penalties. On the other hand, the Stop TRUMP in Crypto Act intends to disallow officials from holding controlling interests in digital assets or related companies, aiming to mitigate insider trading risks and minimize conflicts of interest linked to cryptocurrency dealings.
Broader Legislative Context
While these bills are gaining traction, they are drawing support primarily from consumer advocacy groups. In parallel, other legislative efforts are emerging to foster responsible innovation within the cryptocurrency sector. Initiatives such as the Guiding and Establishing National Innovation in U.S. Stablecoins (GENIUS) Act and the Digital Asset Market Clarity (CLARITY) Act are focused on crafting regulatory frameworks that not only protect consumers but also promote growth in the blockchain industry.
