Top Democrat pressures Treasury to halt Trump's plan for a strategic bitcoin reserve

Top Democrat of the House Committee on Oversight and Government Reform Rep. Gerald Connolly pressed the U.S. Treasury Department to cease its plans to create a strategic cryptocurrency reserve following President Donald Trump's pursuit of a national bitcoin reserve and personal crypto holdings.

In a letter sent to Treasury on Thursday, the Virginia Democrat cited "glaring conflicts of interest" in Trump's push for a reserve. Connolly said Trump did not consult Congress and did not "seek congressional authorization" to create the reserve. 

“The creation of a strategic cryptocurrency reserve is poised to enrich the President and his closest allies at the expense of American taxpayers," Connolly said. "I urge you to cease all plans to create a strategic cryptocurrency reserve, and request that you provide a briefing to the staff of the Committee on Oversight and Government Reform.”

The Treasury did not immediately respond to a request for comment.

Last week, Trump signed an executive order to create a strategic bitcoin reserve and a digital asset stockpile. The words "reserve" and "stockpile" have been used interchangeably over the past few months, but sources have noted there are key differences between the two as to whether the U.S. government will proactively acquire cryptocurrencies. 

In Trump's executive order, the reserve would be capitalized by bitcoins held by the Department of the Treasury that were forfeited as part of criminal or civil asset seizures. 

The stockpile includes digital assets other than bitcoin forfeited in criminal or civil proceedings. The order stipulates that the government will not purchase additional assets for the stockpile and may convert stockpiled altcoins into long-term bitcoin holdings.

The way Trump went about announcing his plans confused many. Ahead of issuing the executive order, Trump posted on Truth Social that he planned to create a crypto strategic reserve to include SOL, XRP and ADA. He later clarified that the reserve would also include bitcoin. 

Connolly also highlighted alleged conflicts of interest regarding Trump's dabbling in certain crypto projects. World Liberty Financial, a crypto project backed by Trump, was launched last year, and holds about $76 million worth of cryptocurrencies today down from a high near $380 million before a series of sales. It is also engaging in an ongoing sale of its WLFI tokens.

Connolly also pointed to Trump's eponymous memecoin. The president and First Lady launched TRUMP and MELANIA memecoins days ahead of his Jan. 20 inauguration. 

Connolly asked the Treasury to send a list of steps the Trump administration has made to address conflicts of interest and any safeguards in place. The lawmaker asked for a response by March 27.