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ILLUSTRATIVE IMAGE: The US Capitol at night, representing potential congressional scrutiny of financial institutions and cryptocurrency markets.
Democratic Midterm Gains Could Increase Scrutiny of Wall Street and Crypto
WASHINGTON — October 13, 2026
Democrats could intensify congressional investigations into Wall Street banks, cryptocurrency companies and financial regulators if they gain control of either chamber of Congress in the November midterm elections. Although such a result would not necessarily stop President Donald Trump’s administration from easing financial regulations, it could increase pressure on companies and government agencies through hearings, subpoenas and formal investigations.
Democrats are preparing to examine financial dealings involving Trump and his family, particularly their connections to cryptocurrency businesses and prediction markets. These platforms allow users to trade contracts based on the outcomes of future events. Democratic lawmakers have raised concerns about potential conflicts of interest and whether prediction markets could enable the misuse of confidential government information.
A victory in either the House of Representatives or the Senate would give Democrats greater investigative authority, including the ability to subpoena documents and witnesses. They could also summon senior officials and corporate executives to testify before congressional committees, potentially creating legal costs and reputational risks for the organizations involved.
Kevin Edgar, a partner at law firm BakerHostetler and a former chief counsel of the House Financial Services Committee, said investigations could cover a broad range of actions taken during the administration’s first two years.
Representative Ro Khanna, a Democrat who serves on the House Oversight Committee, has also called for an examination of financial transactions involving the Trump family. In a September 30 interview, he said lawmakers should determine whether cryptocurrency-related dealings had affected national security.
The administration argues that reducing regulatory burdens and supporting emerging financial technologies will encourage economic growth and keep jobs and investment in the United States. Prediction market companies have said they maintain safeguards against misconduct, while the White House has accused Democrats of pursuing politically motivated investigations.
Cryptocurrency executives are also watching the possible leadership of the House Financial Services Committee. Representative Sean Casten has been discussed as a potential challenger to Representative Maxine Waters, the committee’s leading Democrat, if the party wins control of the House.
Casten has supported investigations into the administration’s cryptocurrency connections and called for stricter rules governing the industry. In 2024, he introduced legislation targeting cryptocurrency tools that he said could facilitate money laundering. He also voted against a cryptocurrency market structure bill known as the Clarity Act in 2025, arguing that it could expose Americans to risks.
Ron Hammond, head of policy and advocacy at cryptocurrency trading firm Wintermute, said Casten was not supportive of the industry’s interests. Casten’s spokesperson declined to comment on the possibility of a leadership challenge.
Beyond cryptocurrency, Democrats could investigate financial regulators who have reduced supervision of lenders and eased enforcement. Lawmakers are also expected to examine Wall Street’s role in financing the artificial intelligence boom, including the construction of data centers, as well as the financial sector’s influence on housing costs and other affordability concerns.
Senator Elizabeth Warren, a prominent critic of Wall Street and the leading Democrat on the Senate Banking Committee, is viewed as a potential chair of that panel if Democrats gain control of the Senate. Warren has recently criticized major artificial intelligence companies, arguing that they have gained privileged access to the administration and excessive influence over policymaking.
Warren and Waters have also raised concerns about housing affordability and the weakening of consumer financial protections. When Waters previously led the House Financial Services Committee, she called executives from major U.S. banks to testify on several issues. She could seek similar hearings if she regains the chair.
Some companies are already preparing for greater congressional attention. Kevin Barstow, a lawyer at O’Melveny who previously worked on investigations in the Biden administration, said some of his clients had received letters about various matters, including their dealings with the Trump administration. He said his firm was preparing clients for the possibility that some inquiries would become formal investigations, but did not identify the companies or congressional committees involved.
Greater oversight could also affect how regulators implement the administration’s financial policies. Trump’s regulators have offered banks relief from certain capital requirements, but they have faced questions from Democratic lawmakers during congressional hearings. Agency leaders, particularly those serving on bipartisan boards or commissions, may take a more cautious approach to controversial policies when facing increased scrutiny.
Investigations can also divert time and resources from companies’ normal operations. Businesses may need to hire lawyers and advisers, respond to information requests and prepare executives for public testimony.
The greatest immediate danger may be reputational damage. Shares of online trading platform Webull recently fell to a nearly four-month low after a congressional panel released a report examining the company’s ties to China.
Previous hearings have also led to changes in business practices. Major banks have revised overdraft fees and fraud protections following congressional testimony, while former Wells Fargo chief executive John Stumpf resigned in 2016 after facing intense questioning over the bank’s fake-accounts scandal.
Brian Gardner, chief Washington policy strategist at Stifel, said negative headlines and damage to a company’s reputation were among the main risks created by congressional investigations.
A Democratic gain in the midterms would therefore give lawmakers additional tools to question financial companies and regulators, even if the administration’s broader regulatory agenda continued. The extent of any changes would depend on which chambers Democrats control, the investigations they pursue and how agencies and companies respond.
