The US House Financial Services Committee remains deadlocked over digital asset regulations due to President Donald Trump’s controversial connections with the crypto industry. During the June 4 hearing, Democratic members warned that Trump could exploit the CLARITY Act for personal gain.

📌 Key development: Trump’s $148 million memecoin holder dinner intensified debates

Democrats Raise Objections

Ranking member Maxine Waters stated: “This rushed, overly complex bill will exacerbate investor harm in an already troubled crypto market.” Waters specifically highlighted Trump’s ties to family-backed crypto platform World Liberty Financial.

Maxine Waters addressing Congress
Maxine Waters at June 4 hearing – Source: House Financial Services Committee

Why the CLARITY Act Faces Scrutiny

Introduced by Republicans on May 29, the bill aims to establish clear rules for the crypto industry. However, Democrats argue it:

  • Provides inadequate investor protections
  • Lacks penalties for crypto crimes
  • Contains loopholes that could serve Trump’s personal interests

Former CFTC Chair Timothy Massad called Trump’s crypto activities “a taint on the industry.”

Legislative Developments

The Senate’s GENIUS Act addressing stablecoin regulations passed a crucial vote in May. However, Democratic resistance over Trump’s crypto ties may slow progress.

⚖️ Notable proposal: Waters’ bill would ban presidential family involvement in crypto

Social Media Fallout

Trump’s post on X stating “I support the crypto revolution” fueled further controversy. The White House maintains his memecoin dinner was a “personal event.”

With both chambers of Congress embroiled in debate, the future of digital asset legislation remains uncertain. Analysts suggest compromise efforts may emerge in coming weeks.