The Democratic Party is "encircling" Trump's encryption new policy.

Written by: Bright, Foresight News

On May 1, 2025, Elizabeth Warren, a senior Democratic member of the U.S. Senate Banking Committee, along with five colleagues, sent a joint letter to Treasury Secretary Janet Yellen, harshly stating that the Trump administration’s plan to include crypto assets in the national strategic reserves “could pose a systemic threat to the stability of the U.S. financial system.”

This lengthy 12-page letter not only lists risks such as cryptocurrency price volatility and regulatory arbitrage but also publicly questions for the first time the benefits transfer between the Trump family and the cryptocurrency industry. World Liberty Financial (WLFI), a cryptocurrency company controlled by the Trump family, has recently been exposed for reaching a $2 billion investment agreement with MGX, a venture capital firm supported by the Abu Dhabi government, while the shareholder list disclosed on WLFI’s official website reveals that the Trump family members hold a striking 42% stake.

This is not the first time the Democrats have targeted Trump’s crypto policies. As early as April 29, Maxine Waters, the senior Democratic member of the House Financial Services Committee, successfully blocked a joint hearing on the Republican-led “Crypto Market Structure Bill” on the grounds of “conflict of interest.” In her letter to Committee Chairman Hill, she stated, “When the Trump family profits hundreds of millions of dollars by issuing meme coins (TRUMP) and investing in DeFi projects, any bill that attempts to relax regulations will become a money laundering tool.”

The “gene confrontation” of the two-party cryptocurrency policy

Democratic Party: From “Financial Security” to “Political Settlement”

Elizabeth Warren, as a “crypto hawk” within the Democratic Party, has a stance that dates back to 2017. At that time, she led the drafting of the “Cryptocurrency Bill” which attempted to bring 90% of crypto assets under the purview of securities regulation, requiring exchanges to register with the SEC and disclose user information. This position was further escalated in a joint letter in 2025, where she proposed that the scale of cryptocurrency reserves be limited to within 0.5% of federal assets and mandated that reserve assets must be held in compliant stablecoin forms such as USDC.

The Democratic leader of the House Financial Services Committee, Stephanie Murphy, focused on the topic of “national security.” At a congressional hearing on April 30, she presented FBI investigation data: money laundering transactions conducted through cryptocurrency are expected to increase by 370% in 2024 compared to the previous year, with 62% involving Russian oligarchs and Middle Eastern terrorist organizations. “When the Trump family engages in cryptocurrency 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 struggles between the two parties. The Republican-led “GENIUS Act” attempts to establish a federal regulatory framework for stablecoin issuance, but on May 4th, the Democrats suddenly turned against it, with nine Democratic senators jointly opposing the current version, calling for stronger anti-money laundering measures and scrutiny of foreign issuers. This shift has directly led to a sharp drop in the probability of the bill passing in the Senate to 37%.

Republicans: From “Innovative Freedom” to “Strategic Layout”

In stark contrast to the Democratic Party, the Trump administration is systematically advancing the “strategization” of crypto assets. An executive order signed on January 24 established a digital asset working group led by AI and crypto commissioner, “crypto czar” David Sacks, requiring a report within 180 days that includes a regulatory framework for stablecoins, national crypto reserve standards, and more. On March 6, Trump further signed an executive order announcing the incorporation of 200,000 bitcoins (approximately $18 billion) held by the federal government into the national strategic reserve and exploring the inclusion of assets such as XRP and SOL into the reserve system.

The policy shift is driven by the Republican Party’s profound strategy regarding “digital dollar hegemony”. An analysis by the strategic consulting firm Rhodium Group indicates that Trump’s new crypto policy aims to migrate the settlement function of the dollar from the traditional banking system to the blockchain through the “stablecoin + on-chain assets” model, thereby circumventing the impact of geopolitical friction on the dollar’s status.

Trump’s cryptocurrency policy trends directly influence market sentiment. On March 2, when the White House announced the exploration of the possibility of crypto asset reserves, the price of Bitcoin surged by 12% within 24 hours, breaking through the $95,000 mark. However, this optimistic sentiment did not last; after a joint letter from the Democratic Party was exposed on April 29, the price of Bitcoin plummeted by 8% in a single day, with a market value evaporating by over $200 billion. On-chain data shows that WLFI sold a total of 128,000 ETH (approximately $350 million) from March 1 to April 30, coinciding with the peak of market selling pressure.

The Turbulent “Crypto Empire”

As the operator of the family’s cryptocurrency business, Eric Trump’s personal wealth is deeply tied to the crypto industry. In addition to serving as an ambassador for World Liberty Financial, he also acts as an advisor for Japanese crypto giant Metaplanet and American Bitcoin, a U.S. Bitcoin mining company, with a combined annual salary exceeding 20 million dollars.

This conflict of interest has sparked strong dissatisfaction among Democrats. Warren stated in a joint letter: “When Eric Trump promotes the Dubai crypto tower at the Token2049 summit, he is essentially leveraging the political capital of the presidential family for financial gain.” The American center-left watchdog organization Accountable.US referred to the Trump Coin ranking plan as “the most brazen presidential corruption fundraising scheme in American history,” believing it will open the door for wealthy donors to access the President of the United States and facilitate the Trump family’s personal enrichment.

According to OpenSecrets data, the cryptocurrency industry donated over $120 million to federal political candidates in 2024, with 78% going to the Republican Party. Leading companies like Coinbase have donated $35 million to Trump’s campaign team through PACs (Political Action Committees) in exchange for policy support. This “money politics” has heightened the vigilance of the Democratic Party, with Congressman Brad Sherman presenting evidence at a hearing: among WLFI’s investors are the Saudi sovereign wealth fund and Russian oligarchs, and these funds could be laundered through cryptocurrency transactions.

The tech giants in Silicon Valley and the “old money” on Wall Street are showing a divided stance in this game. BlackRock CEO Larry Fink openly supports Trump’s crypto reserve plan, calling “Bitcoin the digital gold to fight fiscal deficits.” Meanwhile, renowned economist and famous gold bull Peter Schiff insists, “U.S. stock index futures and the dollar are both facing sell-offs. But gold and Bitcoin are showing completely opposite trends again. Gold is behaving like a safe-haven asset, rising about 1%. In contrast, Bitcoin’s trading performance is like a risk asset, falling about 2%. Clearly, Bitcoin is not digital gold.”

Currently, there are three key bills before the U.S. Congress: the Republican-led “Crypto Market Structure Act,” the Democratic “Crypto Consumer Protection Act,” and the bipartisan compromise “Stablecoin Regulatory Framework.” Analysts point out that if Trump fails to push at least one bill through by November 2025, the crypto industry will face the risk of a “regulatory vacuum.”

May 6 is the deadline for the White House to establish a strategic Bitcoin reserve and an order for the 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 “assignment” on time?