Fed Officials Face Crypto Ban Under Torres’ New Bill—Because Nothing Says ’Transparency’ Like Forcing Politicians to Miss the Next Bull Run

Congressman Ritchie Torres just dropped a legislative bombshell: a proposal to bar federal officials from trading or holding cryptocurrencies. The move reeks of performative regulation—Wall Street gets to play with Bitcoin ETFs, but D.C. insiders get locked out? Sure.

Torres’ bill targets ’conflict of interest,’ but cynics note it conveniently ignores how many lawmakers already dump crypto holdings before votes. Meanwhile, the SEC keeps approving futures-based products for institutional whales. Priorities.

One hedge fund manager quipped: ’Guess they’d rather have officials yoloing taxpayer money on meme stocks instead.’ Ouch.

Bill could have passed last year

The bill arrives amid ongoing regulatory efforts in the crypto sector and as Congress continues to debate how to classify, regulate, and oversee the industry. 

Paradigm’s vice president of regulatory affairs, Justin Slaughter,to news of the bill by noting that such a measure could have passed a year earlier had Congress moved forward on the “McHenry-Waters package.”

The package refers to bipartisan legislative measures introduced by former House Financial Services Committee Chairman Patrick McHenry and Ranking Member Maxine Waters. The measures focused on the impact of artificial intelligence (AI) on the financial services and housing sectors.

Slaughter added:

Messari co-founder Ryan Selkis also weighed in, expressing skepticism about the bill’s prospects. 

Responding to Slaughter, Selkis wrote:

He also criticized recent legislative efforts to regulate memecoins and stablecoins as part of broader packages. 

Slaughter acknowledged the shift in the political landscape and agreed that such a move would be “impossible now,” and will likely serve as more of a “cautionary tale.”

The draft bill does not appear in a broader regulatory package, and its introduction could be independent. 

While Torres did not officially file the legislation, public discussion of its contents has reignited concerns over policymakers’ exposure to crypto markets.

This year, Democrat lawmakersfor records regarding World Liberty Financial and called the Treasury toof a federal strategic Bitcoin reserve.

Existing financial disclosure rules for public officials do not explicitly address blockchain-based assets’ unique characteristics or traceability, leaving a gap that the Torres bill, which prohibits profiting on crypto, seeks to address directly.