Trump and Musk under fire for alleged cryptocurrency manipulation during intense Senate hearing

During a recent Senate hearing, Senator Nydia Velázquez (D-NY) highlighted the pressing need for bipartisan legislation to regulate stablecoins effectively, applauding Representative Maxine Waters for her efforts in implementing strict regulations to supervise the cryptocurrency industry while promoting financial accessibility and innovation.

Velázquez expressed significant concerns about potential conflicts of interest involving influential political and business figures linked to the crypto and stablecoin sectors. She specifically called out President Donald Trump and Elon Musk, accusing them of engaging in actions that raise ethical questions.

According to Velázquez, Trump actively promoted his memecoin (TRUMP) on social media just days before his second term. Similarly, Melania Trump introduced her cryptocurrency shortly before the presidential inauguration. The subsequent crash of both tokens led to losses of over $2 billion for ordinary investors, while insiders connected to Trump allegedly profited around $350 million collectively.

Elon Musk also faced criticism from Velázquez, citing his Department of Government Efficiency, which he based on Dogecoin. Musk’s frequent promotion of this memecoin on social media resulted in numerous lawsuits accusing him of market manipulation.

The senator highlighted concerns about Secretary of Commerce Howard Lutnick, whose association with Tether, the controversial stablecoin issuer, raises concerns about potential conflicts of interest between his personal financial gain and his official government responsibilities.

Adding to the apprehension, Velázquez pointed out Elon Musk’s plans to convert X into a digital wallet and launch his own stablecoin. Similarly, Trump’s World Liberty Financial announced the forthcoming release of its stablecoin, USD1.

Velázquez concluded by underscoring the importance of the proposed stablecoin legislation explicitly forbidding government officials from profiting through their involvement in stablecoin issuance, regardless of their political affiliation.

In today’s current climate, ensuring ethical practices and accountability in the cryptocurrency industry remains essential to safeguard investors’ interests and maintain economic stability. The regulatory framework must address potential conflicts of interest and prevent market manipulation by influential figures to promote a fair and transparent financial environment. The proposed stablecoin legislation represents a crucial step towards achieving these goals and establishing confidence in the cryptocurrency sector among investors and regulatory authorities alike.