Congressional Rift Widens as Democrats Boycott Joint Crypto Hearing

On Tuesday, May 6, 2025, the U.S. Congress became the stage for a sharp partisan divide over crypto regulation, as Democrats boycotted a joint hearing titled “American Innovation and the Future of Digital Assets: A Blueprint for the 21st Century,” accusing President Donald Trump of a conflict of interest. 

As a result, Republicans held their own roundtable discussion, while Democrats organized a separate event nearby.

The dispute unfolded against the backdrop of the Senate’s progress on the GENIUS Act, a bill that would impose strict requirements on stablecoin issuers, including:

• 100% reserve backing in U.S. dollars and other liquid assets 
• Annual audits 
• Robust AML compliance standards

A group of senators, led by Ruben Gallego and Mark Warner, voiced concerns over foreign stablecoin issuers and the associated risks of money laundering.

Meanwhile, the Trump family launched:

• Memecoins ahead of the inauguration
• World Liberty Financial with its own stablecoin 
• A $1.5 million-per-plate dinner for MAGA Inc.

A Deliberate Boycott of the Hearing

At the outset of the scheduled hearing, Representative Maxine Waters, the top Democrat on the House Financial Services Committee, declared a boycott and raised concerns over Trump’s influence on regulatory agencies.

I object to this joint hearing because of the corruption of the President of the United States and his ownership of crypto and his oversight of all the agencies,

Maxine Waters said.

Committee Chairman French Hill responded by accusing the Democratic ranking member of throwing a partisan wedge into what had been a constructive process.

Related: Senate Standoff: Democrats Withdraw Support for Stablecoin Bill

Through her actions today, the ranking member has thrown partisanship into what has historically been a strong, good working bipartisan relationship,

French Hill said.

In response, Republicans, led by Representative Bryan Steil, abandoned the formal hearing format and proceeded with a roundtable.

Democratic Roundtable: Accusations and Policy Proposals

After walking out of the official hearing, House Democrats convened their own roundtable in a nearby room, joined by legal scholars and former regulators. Among them was former CFTC Chairman Timothy Massad, who proposed creating a self-regulatory organization to coordinate oversight between the SEC and CFTC.

It’s a way of establishing jurisdiction over this market without rewriting the securities laws, without undermining the authority of the SEC or the CFTC and it brings those two agencies together, which I think is very important,

Timothy Massad said.

In addition, Democrats unveiled draft legislation that would prohibit senior government officials from holding crypto assets, including:

• The President
• The Vice President
• Members of Congress and their immediate families

Related: Warren Demands SEC Release Information on WLFI, Investigating Trump Ties

Republican Roundtable and Legislative Initiatives

Meanwhile, Republicans hosted a separate roundtable across the hall, discussing a digital asset market structure bill modeled on the FIT 21 framework. The proposal had previously secured support from 71 House Democrats when it passed in May 2024. Greg Tusar, Coinbase’s Vice President of Institutional Products, described the initiative as a positive step.

Related: Paul Atkins Becomes 34th SEC Chair, Pledges Transparent Crypto Regulation

Bryan Steil, Chair of the House Subcommittee on Digital Assets, cautioned that the absence of clear rules exposes investors to growing risks.

I think the danger we have in this country is if we put our head in the sand and fail to regulate in this space, we actually have more risk than we do today,

he said.