WASHINGTON: A Democratic victory in either chamber of the US Congress in the November 3 midterm elections could significantly increase regulatory and congressional scrutiny of Wall Street banks, cryptocurrency companies and prediction market operators.
While Democratic control of the House or Senate would not directly prevent President Donald Trump’s administration from continuing its financial deregulation agenda, it would give the party stronger investigative powers, including subpoena authority, larger committee staffs and the ability to summon regulators and corporate executives for congressional hearings.
Polls and political analysts currently see Democrats as well positioned to retake the House, while control of the Senate remains competitive. Republicans currently hold a 53-47 Senate majority, meaning Democrats would need to make gains in several closely contested races to take control of the chamber.
Kevin Edgar, a partner at BakerHostetler and former chief counsel of the House Financial Services Committee, said developments during the first two years of the Trump administration could become potential subjects of congressional investigations.
The Trump administration has sought to ease financial regulations and supervision that it argues restrict economic growth, while supporting emerging sectors including cryptocurrencies and prediction markets.
Crypto and prediction markets could face closer examination
Democratic lawmakers have already signalled interest in examining President Trump and his family’s connections to cryptocurrency and prediction market businesses, citing potential conflicts of interest.
Lawmakers have also raised concerns about prediction markets, arguing that the platforms could create opportunities for misconduct or potentially allow individuals with access to sensitive government information to profit from confidential developments. Prediction market operators maintain that they have controls in place to prevent improper trading.
Representative Ro Khanna, a Democrat serving on the House Oversight Committee, told Reuters that lawmakers should examine financial and cryptocurrency transactions to determine whether national security interests may have been compromised.
The cryptocurrency industry is also closely watching potential changes in leadership at the House Financial Services Committee.
Representative Sean Casten has reportedly considered challenging Representative Maxine Waters for the committee chairmanship if Democrats regain control of the House.
Casten has previously supported stricter cryptocurrency regulation and investigations into the administration’s links with the sector. In 2024, he introduced legislation targeting cryptocurrency tools that he argued could facilitate money laundering, while in 2025 he voted against the crypto industry’s Clarity Act.
The crypto sector has spent heavily during recent US election cycles to support candidates viewed as favourable to digital asset legislation, although political disagreements over Trump-linked crypto interests have complicated the industry’s bipartisan strategy.
Banks, AI and housing could also come under scrutiny
Wall Street banks may also face increased oversight if Democrats gain congressional control.
Potential areas of investigation include regulatory decisions to ease bank supervision, Wall Street financing of artificial intelligence infrastructure and data centres, consumer financial protections and housing affordability.
Senator Elizabeth Warren, the leading Democrat on the Senate Banking Committee, could become chair of the panel if Democrats capture the Senate. Warren has frequently criticised major financial institutions and has recently focused on the influence of large AI companies on government policy.
Waters, meanwhile, has previously required chief executives of major US banks to testify before the House Financial Services Committee and could resume similar hearings if she returns as committee chair.
Legal experts say some companies are already preparing for the possibility that existing congressional inquiries could become formal investigations following the elections.
Congressional probes could create reputational risks
For financial institutions and cryptocurrency companies, congressional investigations can result in substantial legal and advisory expenses, but reputational damage may represent the greater concern.
Hearings can also pressure companies into changing business practices. Previous congressional scrutiny of major banks has contributed to changes involving overdraft fees, fraud protections and other consumer policies.
The degree of additional oversight will ultimately depend on the outcome of the November 3 elections. Democrats need a net gain of four House seats to secure control of the chamber, while several closely fought Senate contests are expected to determine which party holds the upper chamber.
