HR-3573-119
Referred to the House Committee on Financial Services.
Sponsored by Maxine Waters (D-CA)
What it does
This bill would prohibit the President, Vice President, Members of Congress, and their spouses, children, and children's spouses from owning a controlling stake in a digital asset, serving as an officer or director of a digital asset issuer, issuing or promoting digital assets for compensation, or trading digital assets while in possession of material non-public information. It would also bar these individuals from using trusts, corporations, or other intermediary arrangements to indirectly engage in these activities. Violations would be subject to civil fines and criminal imprisonment.
Who benefits
Retail cryptocurrency investors who may benefit from reduced risk of market manipulation by officials with regulatory power. Competing digital asset issuers who would no longer face officials with financial incentives to favor certain assets. Voters and ethics watchdog organizations seeking stricter conflict-of-interest rules for federal officials. Journalists and transparency advocates who would gain a clearer legal standard for reporting on official financial conduct. Cryptocurrency market participants broadly, if reduced official involvement increases market credibility.
Who is hurt
Current and future federal officials who hold or wish to hold digital assets, including any who have already issued or promoted cryptocurrency products. Spouses and adult children of officials who would face restrictions on their own financial activity. Digital asset issuers or projects that have existing relationships with covered officials and would need to sever those ties. Legal and compliance professionals who would face uncertainty during any transition period. Officials from non-political backgrounds (e.g., tech or finance) who may be deterred from public service by the breadth of the restrictions.
Supporters argue
Supporters argue that federal officials who hold regulatory and legislative power over digital asset markets have a direct financial incentive to shape policy in ways that benefit their own holdings — a structural conflict of interest that existing ethics laws do not adequately address. They point to specific, publicly reported instances of senior officials and their family members issuing or promoting cryptocurrency products while those same officials influence digital asset legislation and regulation, arguing this creates an unprecedented opportunity for self-dealing. Supporters contend that the bill closes a concrete loophole by extending restrictions to indirect ownership through trusts and corporations, preventing the workarounds that have historically undermined financial conflict-of-interest rules.
Opponents argue
Opponents argue that the bill is unconstitutionally overbroad, imposing sweeping financial restrictions on officials' family members — including adult children and their spouses — who are private citizens with no direct role in government and whose independent financial decisions should not be subject to federal prohibition. They contend that blanket bans on asset ownership go further than existing conflict-of-interest law requires and may deter qualified candidates from public service, particularly those from financial or technology backgrounds. Opponents also argue that the bill's scope — covering all digital assets and all forms of indirect ownership — lacks the precision needed to survive constitutional scrutiny and could be challenged under the Due Process Clause of the Fifth Amendment as an arbitrary deprivation of property rights.
Constitutional context
Congress has broad authority to set ethics and conduct rules for its own members under Article I and for executive officers under its legislative power, but restrictions on private citizens (family members) may raise Due Process concerns under the Fifth Amendment. Post-Loper Bright (2024), any agency rules implementing this bill's provisions would face independent judicial scrutiny rather than deference, meaning enforcement regulations would need to be tightly grounded in the bill's statutory text.
Checks and balances
Congress gains authority to define and enforce conduct standards for the executive and legislative branches; enforcement would likely fall to the Department of Justice or a designated ethics body, with judicial review available to any individual challenging the restrictions.
Historical precedent
The STOCK Act of 2012 similarly prohibited Members of Congress and executive branch officials from trading securities based on material non-public information obtained through their official duties, establishing a direct precedent for legislating financial conduct restrictions on federal officials.