Republican Senator Cynthia Lummis Takes Aim at Two Federal Agencies on Behalf of the Crypto Industry

Republican U.S. Senator Cynthia Lummis defended the crypto industry from two federal agencies this week, just ahead of the broad transition in the federal government as President-elect Donald Trump takes office again.

Lummis cautioned the U.S. Marshals Office to slow down its crypto asset sales and warned officials at the Federal Deposit Insurance Corp. that anyone who destroys evidence about whether the agency directed banks to drop digital assets clients will be prosecuted, in two of the sector's most prominent ongoing issues.

Keeping the idea of a U.S. bitcoin reserve top-of-mind as a new Congress begins work and Trump returns to the White House next week, the Wyoming Republican sent a letter this week to the director of the U.S. Marshals Office cautioning that the department should reconsider its plans to quickly liquidate the crypto assets seized in the Silk Road case. The sales of bitcoin (BTC) , including current holdings of almost 70,000 bitcoin now worth about $6.9 billion, are inappropriate, she argued, considering Trump's interest in a U.S. bitcoin strategic reserve.

"The Department continues to aggressively push forward with liquidation plans despite pending legal challenges, demonstrating an unusual urgency to dispose of these assets," Lummis wrote. "This rushed approach, occurring during the presidential transition period, directly contradicts the incoming administration's stated policy objectives regarding the establishment of a National Bitcoin Stockpile."

On its own, there's little authority the Marshals Office would have to change course from the predetermined liquidation plans already in motion, and it can't make decisions based on a hypothetical government stockpile. The president and Congress would have to move to formally establish a reserve and a process by which the U.S. could redirect seized or purchased tokens into that fund.

Crypto markets also noted on Thursday the reports that Trump may be interested, too, in reserves of other, U.S.-based tokens.

Lummis also sent a letter to the FDIC on Thursday, saying that agency insiders have reported that there's an internal effort to conceal evidence of what the crypto industry knows as Operation Chokepoint 2.0 — a campaign to sever digital assets activities from U.S. banking. She said any effort to keep such materials from scrutiny would be "illegal and unacceptable."

A spokeswoman for the FDIC declined to comment on the letter.

The Senate Banking Committee has established a subcommittee focusing on digital assets this year, and Lummis is reportedly leading it. She and Senator Tim Scott, the chairman of the full committee, will have a chance to run the panel's crypto agenda in this new session, although they'll be countered by its ranking Democrat, Senator Elizabeth Warren of Massachusetts.

Scott issued a plan for the committee this week, including the crafting of a U.S. regulatory framework for digital assets. He said he'd "foster an open-minded environment for new, innovative financial technologies and digital asset products, like stablecoins, that promote financial inclusivity."