Ranking member Sen. Pat Toomey (R-PA) questions Treasury Secretary Janet Yellen and Federal Reserve Chairman Powell during a Senate Banking, Housing and Urban Affairs Committee hearing on the CARES Act, at the Hart Senate Office Building in Washington, DC, September 28, 2021.
Kevin Dietsch | Pool | Reuters
Congress is taking a hard look at crypto — as an investment opportunity.
Eight lawmakers or their immediate family have traded cryptocurrencies over the past year, with bets ranging from about $1,000 to as high as $100,000, a CNBC analysis found.
Seven Republicans bought or sold crypto, including Sen. Pat Toomey of Pennsylvania, the ranking member of the banking committee. Only one Democrat reported a transaction, Rep. Marie Newman of Illinois, according to the analysis.
The most popular cryptocurrency by far was bitcoin, with trades totaling an estimated $229,000, including through an ETF. Second was ether, with a total of about $40,000. Lawmakers even got into the meme coin trend, trading roughly $32,000 of dogecoin.
Members of Congress also dabbled in some less well-known cryptocurrencies: Cardano, Stellar, Celo, Chainlink, Basic Attention Token and EOS.
Each trade is reported as a range, rather than a specific value. In its analysis, CNBC used the midpoint of the range to tally total transaction activity. The analysis is based on congressional financial disclosures and information from Capitol Trades, a public database compiled by 2iQ.
The crypto trades create another wrinkle in the debate over potential conflicts of interest in Congress. The cryptocurrency industry is ramping up its lobbying machine as lawmakers and regulators weigh new rules for the sector. But it’s unclear whether crypto would be covered by proposals to ban lawmakers from trading individual stocks.
Sen. Sherrod Brown, D-Ohio, who has introduced legislation prohibiting stock trading, told CNBC that crypto presents different issues than traditional investing. Brown heads the Senate Banking Committee, which held a hearing on stablecoins Tuesday.
“Members of Congress shouldn’t buy and sell corporate stocks here. I fought against that practice for a decade,” he said. “Crypto is more complicated than that.”
Toomey has been outspoken against any trading ban, arguing that it could disincentivize public service. He has defended existing laws that mandate financial disclosures and explicitly bar Congress from insider trading. A spokeswoman said his investment in crypto is merely a reflection of broad financial trends.
Toomey bought shares of Grayscale’s bitcoin and ether investment vehicles in June, each purchase valued between $1,000 and $15,000.
“Given that crypto has become a meaningfully sized asset class, maintaining a well-diversified investment portfolio now means owning some crypto,” Toomey’s spokeswoman said. “To that extent, crypto makes up a very modest portion — less than 1% — of his overall investment portfolio.”
Toomey has also been an advocate for the industry, sponsoring a bill last summer that would have allayed concerns about crypto-reporting requirements to the IRS. One of his cosponsors was GOP Sen. Cynthia Lummis, who has embraced the industry as the next frontier for her home state of Wyoming.
Lummis was one of the first lawmakers to invest in crypto. She previously told CNBC she bought five bitcoin in 2013 for about $300 each. In August, she invested between $50,000 to $100,000, according to her financial disclosures. Her office declined to comment for this story.
However, two of the lawmakers who traded cryptocurrencies over the past year told CNBC that they support limits on Congress’s financial activity.
Newman’s financial disclosures indicate that her husband invested between $15,000 and $50,000 in the Grayscale Bitcoin Trust in November. Between about $1,000 to $15,000 was purchased in January through a joint account. A spokesman said both trades were handled by her husband.
“As part of the family’s overall savings program to pay for college tuition, the family’s extensive health-care costs and retirement, Congresswoman Newman’s husband for years now has invested in a variety of companies based on public information,” he said. “These trades are conducted by her husband and are regularly disclosed in alignment with the House’s current policy.”
Her spokesman also said Newman supports efforts to limit or ban trading by lawmakers — including in crypto.
GOP Rep. Mike Waltz of Florida also told CNBC he is in favor of limiting congressional stock trading, though he did not specify whether he would support an outright ban or whether crypto should be included.
Waltz bought bitcoin twice in June, each time investing between $15,000 and $50,000. He said the purchases were made with the advice of his financial manager, but that he also sees the potential for crypto to revolutionize the financial markets.
“From a public policy perspective, I believe crypto and blockchain are beneficial for consumers because it serves as a hedge against inflation, authoritarian regimes hate it, and it democratizes currency for the underserved who are cut off from traditional capital,” he told CNBC.
The most active crypto trader in Congress over the past year was Rep. Mark Green, R-Ten. He reported 16 transactions of about $1,000 to $15,000 each, mostly through a joint account. For example, his disclosures show he purchased dogecoin on April 1 for about six cents. He bought more on April 14 at about 12 cents. He sold on May 11 when doge hit about 50 cents.
His spokeswoman said the trades are handled by a financial advisor who has written instructions not to take any direction from the congressman.
“Instead of more rules, what we need is for more enforcement of the rules,” Green said in a statement to CNBC. “Anyone can look up every stock that any member of Congress owns right now online. My investments are managed by a licensed broker, and my wife and I have no say in how those assets are invested.”
GOP Rep. Michael McCaul of Texas disclosed that his child had invested between $1,000 and $15,000 in the Grayscale Bitcoin Trust. His spokeswoman declined to comment for this story.
Two other lawmakers who traded crypto — Republicans Sen. Ted Cruz of Texas and Rep. Barry Moore of Alabama — did not respond to requests for comment.