Crypto Journalist

Amin Ayan

Crypto Journalist

Amin Ayan

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Amin Ayan is a crypto journalist with over four years of experience in the industry. He has contributed to leading publications such as Cryptonews, Investing.com, 99Bitcoins, and 24/7 Wall St. He has…

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July 28, 2025

A group of Senate Democrats is demanding answers from the head of the Federal Housing Finance Agency (FHFA) over a controversial move to consider crypto assets in mortgage assessments.

In a letter sent Friday, five senators led by Jeff Merkley raised concerns about FHFA Director William Pulte’s recent directive instructing Fannie Mae and Freddie Mac to explore how crypto holdings could factor into mortgage risk evaluations without being converted into US dollars.

The letter, co-signed by Senators Elizabeth Warren, Chris Van Hollen, Mazie Hirono, and Bernie Sanders, calls for a detailed explanation by August 7.

“We urge you to fully assess the potential risks and benefits of your order and its implications for the U.S. housing market and financial system,” the senators wrote.

FHFA Rules Require Crypto to Be Converted Before Mortgage Use

The FHFA has overseen Fannie Mae and Freddie Mac since the 2008 financial crisis, when both institutions were placed under federal conservatorship.

Under current policy, crypto holdings must be liquidated into fiat before being considered in mortgage applications.

Pulte’s order, however, signals a possible shift. The senators say such a move “could introduce unnecessary risks to consumers and pose serious safety and soundness concerns for the U.S. housing and financial markets.”

They also warned that crypto’s volatility and history of liquidity issues could jeopardize borrowers’ ability to repay loans.

“Borrowers may not be able to exit a crypto position and convert to cash at a price that would allow them to buffer against risk of mortgage default,” they wrote.

Beyond market risk, the senators cited concerns over scams, cyberattacks, and theft, which they say leave homeowners “vulnerable to losing their crypto assets with little hope of recovery.”

The letter also raised potential ethical concerns. “We are concerned about how the FHFA, Fannie Mae, and Freddie Mac will prevent conflicts of interest,” the lawmakers stated, pointing to former President Donald Trump and his family’s involvement in multiple crypto ventures.

The Trumps reportedly have connections to trading platforms, stablecoins, mining businesses, memecoins, and NFTs.

The senators also took direct aim at Pulte, alleging a potential conflict due to his wife’s crypto holdings, which financial disclosures indicate could be worth up to $2 million.

They argue that Pulte’s dual role as FHFA Director and board chair of both Fannie Mae and Freddie Mac is problematic. “You have stacked those boards with industry allies,” the letter said.

Senators Slam FHFA for Lack of Clarity on Crypto Mortgage Order

The lawmakers criticized the lack of transparency surrounding the order, stating it “includes no information on how Fannie Mae and Freddie Mac would develop a proposal” or how the FHFA would assess risks or collect feedback.

They referenced the 2023 banking crisis, where crypto exposure contributed to the collapse of three banks, as a cautionary tale.

They also noted that in 2021, Fannie Mae concluded that crypto use for deposits, payments, or collateral was the “least appealing application” of blockchain.

The senators asked Pulte to provide internal communications related to the order, details on the approval process, and information on how he plans to address potential conflicts of interest.

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The Federal Housing Finance Agency (FHFA) has directed Fannie Mae and Freddie Mac to recognize cryptocurrency as an asset in their assessments of single-family mortgage loan risks. 

This directive, issued by FHFA Director William J. Pulte, marks a pivotal moment in the integration of digital assets within the traditional finance framework, particularly in the realm of home lending.

Crypto As Asset For Home Loans

According to CNBC, the order mandates that both Fannie Mae and Freddie Mac create proposals that allow borrowers to use digital assets without needing to convert them into US dollars before closing a loan. 

Pulte emphasized that this initiative aligns with President Donald Trump’s vision of positioning the United States as a global leader in cryptocurrency.

Historically, cryptocurrency has been largely excluded from mortgage underwriting due to concerns over its volatility, regulatory ambiguities, and the challenges associated with verifying asset reserves. 

However, this new directive signals a shift in perspective, recognizing the increasing acceptance of crypto within institutional finance and federal policy.

A ‘Monumental Shift’

The FHFA’s order acknowledges cryptocurrency as an emerging asset class that could provide opportunities for wealth building outside of conventional stock and bond markets.

Yet, the directive specifies that only digital assets stored on US-regulated, centralized exchanges (CEX) will be considered, ensuring that these assets can be clearly evidenced. 

Additionally, Fannie Mae and Freddie Mac are required to implement measures to account for the “inherent volatility of cryptocurrencies,” ensuring that these assets do not jeopardize their underwriting standards.

Both enterprises will need to submit their proposals for assessment to their respective boards of directors and subsequently to the FHFA for final approval. 

Fannie Mae and Freddie Mac, which were placed under government control in September 2008 as government-sponsored enterprises (GSEs), play a crucial role in the US housing market, holding over $7 trillion in housing loans.

Market expert Echo X weighed in on this development in a recent social media post on X (formerly Twitter), asserting that the decision to allow digital assets as reserves represents a monumental shift. 

The expert noted that this change will enable borrowers to use their crypto holdings as part of their home loan qualifications, eliminating previous barriers that required users to liquidate their assets to qualify for loans. 

According to Echo X, this move opens the floodgates for genuine adoption of cryptocurrency within the housing market, signaling the dawn of a tokenized real estate market supported by the US mortgage system.

This decision caused an uptick in prices across the broader digital asset ecosystem, with Bitcoin (BTC) surging 1.5% toward $107,000 in the 24-hour chart. Consequently, the total crypto market cap also surged to $3.27 trillion.

Featured image from DALL-E, chart from TradingView.com

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The cryptocurrency industry is reportedly targeting the U.S. Securities and Exchange Commission (SEC) in what insiders call an “Italian vendetta” for its overly aggressive regulations during the Biden administration.

According to a new Politico report, big names in the crypto industry like Ripple, Coinbase, and Gemini executives are now taking action against SEC officials as revenge for the agency’s alleged wrongdoings of the past.

Politico reports that a former SEC employee – who was “granted anonymity over concerns of retaliation from the industry” – said they witnessed a law firm decline to move forward with interviewing an individual at the SEC because of the firm’s work in crypto, and In another instance, the former employee said, a law firm pulled an offer altogether for the same reason.

Responding to Politico, Coinbase’s chief legal officer Paul Grewal reportedly said,

“People have a right to earn a living. They have a right to take their talents wherever they want to take them… But we, too, have a right to decide who we’ll work with.”

Says William McLucas, a former enforcement director at the SEC, of the crypto industry attacks on SEC staff,

“You’re penalizing people who were basically doing their jobs.

If they want to rail about the prior commission and its leadership, go ahead.

But singling out lawyers and saying, ‘We want their names out there, we want them labeled as pariahs’ — I’ve never seen anything like it.”

Said an anonymous industry official of the attacks,

“Where’s the goddamn off-ramp? You got Gary Gensler’s scalp. There’s not that many other people you can go after.

It’s an Italian vendetta, and I don’t know what to do. Because in most vendettas, nobody actually wins. Everybody keeps dying.”

The pushback comes as the Republican-led SEC begins reversing enforcement actions initiated under former Chair Gary Gensler. Critics argue his “regulation by enforcement” approach hampered innovation in the crypto space.

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