Democratic Midterm Win Could Intensify Congressional Scrutiny of Crypto Industry

A Democratic victory in the U.S. midterm elections in November could intensify 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 in the midterm elections, they could broaden congressional probes into crypto companies and prediction-market operators.

A congressional majority would give Democrats the power to demand documents from those companies and hold hearings. They would also be able to call top financial regulators and corporate chief executive officers to testify.

In particular, crypto businesses tied to U.S. President Donald Trump's family are emerging as a key target. Democrats are preparing inquiries over possible conflicts of interest stemming from the family's involvement in crypto and prediction-market ventures.

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

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

Even if Democrats take control of Congress, however, they may struggle to fully stop the Trump administration's push to ease crypto regulation. Reuters said tougher congressional scrutiny could slow the pace of policymaking, but the administration's deregulatory approach would likely continue.