House votes to restrict members 'stock trading, reigniting the battle over cryptocurrencies

The U.S. House of Representatives has again launched a move to restrict members 'stock trading, but the focus of discussion has shifted to cryptocurrencies. According to media reports, lawmakers are divided on whether to extend the ban to digital currencies because the move could directly affect an industry that in 2024 provides a large amount of campaign money to politicians running for office and several incumbent lawmakers who hold crypto assets.

The core question is no longer whether stricter ethics apply to politicians, but where the boundaries of these ethics lie. According to media reports, a bipartisan effort to require politicians to use confidential trusts has hit a dilemma: Should Bitcoin and all cryptocurrencies be treated as ordinary stocks?

Virginia Rep. Abigail Spanberg argued that cryptocurrencies should be classified as such because political leaders do have the opportunity to pass legislation to influence their prices. Texas Rep. Chip Roy disagreed, calling cryptocurrencies "a little different" and adding that lawmakers should still be allowed to use digital currencies as a hedge against inflation.

The discussion also recalled previous media reports of ethics reform movements, including Rep. Brian Steele's proposal to strengthen congressional trading oversight.

Why digital assets are the crux

The growing role of cryptocurrencies in Washington explains why the issue is so polarized. According to estimates by a law center, ten current members of Congress hold between $750,000 and $2 million in crypto assets. At the same time, cryptocurrencies have become one of the largest sources of political donations, with total donations during the 2024 election period reaching approximately US$119 million, while other media pointed out that this figure has exceeded US$160 million.

Critics argue that lawmakers should not trade assets they regulate. Senator Jon Osoff said members of Congress should not buy and sell cryptocurrencies while drafting cryptocurrency legislation.

Senator Cynthia Loomis, known for her support of cryptocurrencies, took a different stance. She said she had voluntarily included crypto investments in confidential trusts, but believed that all legislators should not be forced to do so because it could put additional pressure on politicians with fewer assets.

Disclosure laws that have never had a material impact

Congress tried to address this issue with the 2012 Stock Act, which prohibited members of Congress from engaging in insider trading and required them to report transactions within 45 days. However, the bill has done little to quell criticism.

Under the law, the maximum fine for failing to report transactions within the specified time is only $200, and no member of Congress has been prosecuted for insider trading in accordance with the law. In addition, legal experts point out that the "speech or debate clause" in the Constitution also creates additional obstacles to the implementation of the law.

Academic research shows that the law changes certain trading behaviors, but does not eliminate the fundamental problem of conflicts of interest. According to a study published in 2024 that analyzed more than 181,000 transactions made by members of Congress between 2004 and 2022, it found that stock purchases by politicians declined after the enactment of the Stock Act.

However, deals still occur with a high frequency during congressional sessions and times of geopolitical turmoil.

What changes will the new bill bring?

According to a law journal, the latest reform measures focus on the Congressional Confidence Restoration Act, which was submitted to the House of Representatives in September 2025 and has more than 80 co-sponsors. The bill aims to prohibit politicians, their spouses and dependent children from holding or purchasing individual stocks. The biggest outstanding issue remains whether the bill will cover cryptocurrencies.

The bill attracted attention after a report in a legal journal stating that more than 50 lawmakers conducted more than 2000 financial transactions with companies affected by Donald Trump's reciprocal tariff declaration within 55 days of implementing the new policy in February 2025.

However, new findings challenge the legitimacy of a comprehensive ban. A working paper published in 2026 by Chen Haotian and Bruce Sasedot pointed out that between 2012 and 2023, the performance of Congress's investment portfolio was similar to or worse than the overall market.

Far from weakening the case for reform, the finding shifted the direction of discussion. The debate no longer revolves around whether lawmakers can outperform the market, but rather whether they should hold investments that may be affected by the laws they pass. Those who support stronger regulations, including those that may apply to cryptocurrencies, believe that maintaining public confidence is more important than proving illegal profits.