Trump and Musk Accused of Crypto Manipulation in Heated Senate Hearing

In today's Senate hearing, Senator Nydia Velázquez (D-NY) emphasized the urgent need for bipartisan stablecoin legislation.

output: A new bipartisan stablecoin bill is being drafted by Senate Banking Chair Nydia Velázquez (D-NY), who expressed the urgent need for such legislation in a statement on Wednesday.

The legislation aims to build upon House Financial Services Chair Maxine Waters’ (D-CA) new legislation, which seeks to introduce strong oversight over the cryptocurrency industry. This includes establishing an Office of Financial Innovation at the Treasury Department to advise on legislation and regulations.

It will also focus on facilitating financial inclusion and innovation in the new technologies used by the industry.

However, Velázquez expressed concerns regarding potential conflicts of interest involving prominent political and business figures in the cryptocurrency and stablecoin sectors.

She highlighted President Donald Trump and Elon Musk, raising questions about their actions.

According to Velázquez, Trump, just days before his second term, engaged in promoting his own memecoin (TRUMP) and that of his wife, Melania, through social media. Both tokens crashed shortly after the inauguration, with reports indicating that ordinary investors lost over $2 billion, while Trump insiders collectively profited around $350 million.

"Despite the widespread losses incurred by those who invested in these tokens, having personally invested $10,000 in both the TRUMP and MELANIA tokens, I can attest that my investment was quickly wiped out within a few days of the tokens' implosion," a statement from a Trump supporter was cited by Politico.

Elon Musk was also targeted by the senator for his role in the Department of Government Efficiency, which was reportedly based on Dogecoin. The memecoin was a favorite of Musk’s on social media, leading to multiple lawsuits alleging market manipulation.

Additionally, Velázquez pointed out Secretary of Commerce Howard Lutnick’s ties to Tether, the controversial stablecoin issuer, which could create conflicts between his personal finances and governmental duties.

Further intensifying worries, plans by Musk to transform his platform X into a digital wallet and issue his own stablecoin, and Trump-owned World Liberty Financial to launch its stablecoin, USD1, were also mentioned by the senator.

Therefore, Velázquez stressed the importance of the proposed stablecoin legislation explicitly prohibiting government officials, regardless of political affiliation, from profiting through personal involvement in stablecoin issuance.