Democrats are going after Trump through the cryptocurrency portal

The family of US President Donald Trump is preparing to face a new wave of investigations into its business activities, after Democrats pledged to open files related to the president’s profits from cryptocurrencies and his financial relationships with companies operating in the sector, benefiting from their victory in the midterm elections and their control of both chambers of Congress.

This step puts the financial interests of Trump and his family at the forefront of the upcoming political confrontation with the Democrats, who have made what they described as the president’s exploitation of his position for personal gain, and his ties to the cryptocurrency industry, among the most prominent issues of their election campaign. With the restoration of control over the main committees in Congress, the party now has broader powers to subpoena executive officials, request documents, and open investigations that may involve the president, his family members, and companies that benefited from his administration’s policies.

Democratic Representative Robert Garcia, who will chair the House Oversight Committee starting in January, said that the committee will focus largely on investigating the Trump family's business and its profits from cryptocurrencies, noting that the president and his family have made billions of dollars in gains.

World Liberty Financial, a project linked to the Trump family, stands out among the files that are expected to receive special attention. Democratic Senator Richard Blumenthal, who is expected to chair the Senate Investigations Committee, is also preparing to continue scrutiny of the use of cryptocurrencies in illicit activities and the financial relationships of companies operating in the sector.

Billions of dollars in profits

The Democrats' moves are based on the amount of financial interests that Trump and his family have accumulated in the digital currency industry since his return to the White House. According to estimates reported by the Financial Times, the president made more than $1.16 billion last year from cryptocurrency sales and digital token returns.

His activities included launching meme currencies that gave their holders opportunities to access him, establishing digital currency projects that raised questions about foreign investments, as well as receiving donations from officials in the sector for projects related to the presidency, including the new ballroom in the White House.

The ties of the family company, World Liberty Financial, also raised inquiries about foreign investments, including a deal that reportedly involved an entity linked to a member of the UAE’s ruling family purchasing a 49 percent stake in the project. Trump had denied knowing the details of the deal, saying that his sons were handling it.

The company says that the president has no longer been involved in its activities since he took office, but Democrats believe that the relationship between his business interests and his management decisions requires a parliamentary investigation.

Wider powers of investigation

The anticipated investigations are not limited to Trump family projects, as they also include companies that benefited from the easing of regulatory restrictions during his administration, or established close relationships with him and his initiatives.

According to the Financial Times, Democratic members of the Senate have previously directed inquiries to companies, including the Binance platform and Tether, regarding allegations related to illegal activities, money laundering, and compliance with sanctions. As committee chairmanships shift to Democrats, they will have greater ability to compel companies to provide information and respond to previous inquiries.

These files also include Trump's decision to pardon Binance founder Changpeng Zhao, who had previously pleaded guilty in a case related to failure to protect the platform from using its services for money laundering. The sector also faces questions about the relationships of some of its companies with administration officials and their financial contributions to projects linked to the president.

Industry officials believe that companies that previously ignored Democratic inquiries or did not provide satisfactory answers will find themselves under greater pressure, with the new committees having the power to subpoena witnesses and documents, and the possibility of holding televised public hearings.

Bets on Trump under the microscope

The anticipated investigations come despite the large amounts of money spent by the cryptocurrency industry to support candidates in the midterm elections, as its political contributions exceeded about $200 million, through the “Verscheek” committee, which is supported by companies including “Coinbase,” “Ripple,” and “Andreessen Horowitz,” in addition to another committee that received the support of “Tether.”

However, a large number of candidates supported by these parties lost the elections, at a time when Trump’s relationship with the sector and his financial gains from it turned into an electoral issue that Democrats invested in their campaigns.

In parallel with the investigations, the sector faces the possibility that its legislative agenda will falter. The Senate failed to advance the Clarity Act in September, legislation that aimed to set clearer rules for digital asset trading platforms and the companies operating in them. The stumble came amid disagreements over Trump's interests in the sector, along with issues related to investor protection, stablecoin rewards, and competition with banks.

Democrats intend to demand stricter ethics controls, greater consumer protections, and a broader role for the Securities and Exchange Commission in supervising digital assets.

However, the transfer of control to the Democrats does not automatically cancel out the legislative gains achieved by the sector, as reversing some laws requires the issuance of new legislation, while parliamentary committees can influence the work of regulators through oversight, investigations, and pressures related to budgets. Thus, the repercussions of the Democratic victory are not limited to the future of cryptocurrency regulation, but extend to the business interests of the president, his family, and the companies that have been associated with his administration. With the start of the new Congress in January, Washington is preparing for a phase of oversight confrontation that may make Trump's financial activities one of the most prominent files of the second half of his term.