Wall Street, crypto firms could face scrutiny if Democrats win majorities in midterms

Polls suggest Democrats are poised to win the House ‌of Representatives and have an edge in the race for the Senate. J. David Ake / GettyShareAdd NBC News to GoogleOct. 13, 2026, 9:24 AM EDT / Source: ReutersBy ReutersA Democratic victory in one or both chambers of Congress would not stop President Donald Trump’s administration from handing regulatory ​breaks to Wall Street banks, prediction markets and crypto firms, but it would give Democrats powerful tools to probe the industries and their watchdogs.

Polls suggest Democrats are poised to win the House ‌of Representatives and have an edge in the race for the Senate. If the party prevails in either chamber, it would gain subpoena power, larger investigative staffs and the power to call in agency heads and corporate CEOs to testify, creating headaches and potential legal entanglements for those under scrutiny.

“Everything that has gone on in the first two years of this administration is fair game for investigations,” said Kevin Edgar, a partner at BakerHostetler and former chief counsel of the House Financial Services Committee.

The administration’s financial policy agenda includes easing rules and supervision it ​says are too onerous and impeding economic growth, while promoting innovation that it says will boost the economy, including crypto and prediction markets.

Democrats are already preparing to investigate Trump’s and his family’s ties to the crypto ​and prediction market industries, Reuters reported. They say such dealings are a conflict of interest. The party has also been pushing for more oversight of prediction markets, which they say ⁠may be creating new avenues for misconduct and undermining national security by allowing government insiders to broadcast confidential information.

Prediction markets say they vigilantly guard against misconduct.

Asked about such potential probes in a September 30 phone interview, Representative Ro Khanna, ​a Democratic member of the House Oversight Committee, told Reuters: “I absolutely think we need to look at these financial transactions, these crypto transactions, and see if any of our national security has been compromised.”

Crypto ​executives said they are especially worried that Rep. Sean Casten may challenge Maxine Waters, currently the top Democrat on the House Financial Services Committee, for the chair if Democrats win. Punchbowl News reported last month that Casten had weighed such a move. His spokesperson declined to comment.

Rep. Sean Casten.Tom Williams / CQ-Roll Call via Getty Images fileCasten has been a vocal proponent of probing the administration’s crypto ties and of tougher crypto rules. In 2024, he introduced a bill curbing crypto tools he said aid money laundering. He also voted against the industry’s Clarity Act bill in 2025, saying it would ​put Americans at risk.

“He is no friend of the industry,” said Ron Hammond, head of policy and advocacy at Wintermute, a crypto trading firm.

The White House did not respond to a request for comment. A spokesperson told Reuters last ​month that Democrats plan “to obstruct and baselessly target President Trump’s commonsense agenda.” The administration says supporting crypto and prediction market innovation will keep American jobs and capital onshore.

Sen. Elizabeth Warren is poised to chair the Senate Banking Committee if Democrats take the majority.Al Drago / Bloomberg via Getty Images fileSen. Elizabeth Warren, the top Democrat on the Senate Banking Committee and a veteran Wall Street critic, is seen as the frontrunner to chair that committee. She has recently focused her criticism on major AI companies, saying the industry has gained special access to the administration and influence over policy.

Both Warren and Waters have also repeatedly raised concerns over affordability, including housing issues, and accused the administration of eroding consumer finance protections. When Waters previously ran the House committee, she called the CEOs of ​the largest US banks to testify on a range of ​issues, and is widely expected to do so ⁠again if she reprises its leadership.

A spokesperson for Warren declined to comment, while a spokesperson for Waters did not immediately provide comment.

Kevin Barstow, an attorney at O’Melveny who previously handled probes while working in the Biden White House, said congressional investigators are already laying the groundwork.

“Some of our clients have received letters, regarding a variety of issues, including their interactions ​with the administration. We are preparing our clients that some of these inquiries are likely to become formal investigations,” Barstow added, without specifying which committees or clients.

Trump’s regulators are handing ⁠Wall Street banks major capital relief, and have already clashed with Democrats when defending their policies during congressional hearings.

But agency heads, especially those who sit on bipartisan boards or commissions, cannot completely ignore Democratic lawmakers, and may move cautiously on very contentious issues, said executives. Addressing oversight queries and preparing for testimony is often time-consuming, and can distract from policy initiatives, they added.

For companies, congressional oversight usually creates legal and advisory costs, but adverse headlines are the greatest hazard, said attorneys and analysts. Last ⁠week, for example, ​shares of online trading platform Webull BULL.O dropped to a near four-month low after a congressional panel published a report probing its ties to ​China.

In 2016, John Stumpf, then CEO of Wells Fargo, testified on Capitol Hill.Cliff Owen / APDuring hearings, CEOs can also be wrongfooted, pressured into business changes, or worse. Big banks made changes to overdraft fees and fraud protections following previous testimony, for example, while former Wells Fargo CEO John Stumpf abruptly resigned in 2016 after stumbling during hearings on the bank’s fake accounts scandal.

“The biggest ​risks are headline risk and reputational,” said Brian Gardner, chief Washington policy strategist at Stifel.

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