Washington lawmakers don’t plan to sell crypto stocks despite FTX
The collapse of cryptocurrency exchange FTX has pulled a host of other companies down with it and threatens the stability of the digital coin marketplace, but some lawmakers on Capitol Hill are holding on to their crypto investments — even as they call for tighter regulations.
At least nine lawmakers in Washington across both the House and Senate have traded over a dozen different crypto stocks since last year, according to Capitol Trades, a website that tracks stock trades by lawmakers on Capitol Hill.
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Another lawmaker, Republican Sen. Tommy Tuberville of Alabama, disclosed at a Senate Agriculture Committee hearing about FTX on Thursday that he, too, holds some crypto assets. Tuberville’s most recent disclosure reports from this year reviewed by CNBC do not show any crypto stock purchases.
Out of all ten offices contacted, only one said they sold their crypto stock holdings after FTX imploded. Rep. Marie Newman, D-Ill., who lost her bid for reelection owned crypto stock up until last week, recently sold her digital token stocks as the industry took a hit.
“Congresswoman Newman’s husband sold their coin-based stock last week due to the volatile nature of the sector,” Marcus Garza, a spokesman for Newman, told CNBC in an email.
Congressional records show Garza and her husband previously held positions in multiple crypto related stocks, including in Coinbase Global, a cryptocurrency trading platform. Newman and her husband recently disclosed a January joint purchase of Coinbase stock worth between $1,001 and $15,000. The disclosure reports for all lawmakers only show a range of how much their stock purchases are worth.
Coinbase’s stock price, as of Thursday morning, is down by over half a percentage point.
Kedric Payne, an ethics attorney at the Campaign Legal Center, said lawmakers who own crypto assets have a conflict of interest in trying to write laws to rein in the industry following the collapse of FTX.
“This is another example of how even well-intentioned lawmakers can’t escape the perception of corruption when they own individual stocks or crypto,” Payne said in an email. “Voters won’t likely trust that lawmakers who own crypto will regulate it to their detriment. Reform is inevitable because these conflicts of interests are not going away.”
He noted that these conflicts can be avoided if Congress passed laws that put “a ban on members and spouses trading individual stocks unless there in a blind trust.”
Walter Shaub, who was the director of the United States Office of Government Ethics under former Presidents Barack Obama and, for a short stint, Donald Trump, said lawmakers shouldn’t hold crypto assets when they are looking at writing new laws to tighten oversight of the industry in the wake of the FTX scandal.
“It is outrageous that members of Congress would be invested in cryptocurrency and related companies at a time when…
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