Democratic Midterm Win Could Intensify Congressional Scrutiny of Crypto Industry

A Democratic victory in the U.S. midterm elections in November could lead to tougher congressional investigations and oversight of the cryptocurrency industry.

Reuters reported on October 13 that if Democrats win control of either the Senate or the House, they could expand congressional probes into crypto companies and prediction-market firms.

A Democratic majority in Congress would give the party the power to demand documents from those companies and hold hearings. It would also allow lawmakers to summon financial regulators and chief executive officers to testify.

The Trump family's crypto ventures are emerging as a key potential target. Democrats are preparing an investigation over possible conflicts of interest tied to the family's involvement in cryptocurrency and prediction-market businesses.

Representative Ro Khanna, a Democrat, said, "We need to examine these financial transactions and cryptocurrency trades and determine whether national security has been compromised."

Kevin Edgar, a partner at BakerHostetler, said everything that took place during the first two years of the Trump administration could come under investigation.

Even if Democrats win a congressional majority, however, they may struggle to completely stop the Trump administration's push to ease crypto regulation. Reuters said stronger congressional investigations and oversight could slow the pace of policymaking, but the administration's deregulatory agenda would probably continue.