Experts are warning Quebec investors of the risks associated with purchasing virtual tokens of $TRUMP and $MELANIA, whose business model has not yet been studied by the Financial Markets Authority (AMF).
• Also read: Donald Trump launches his cryptocurrency: “It’s quite impressive what’s happening”
• Also read: Cryptocurrency platform co-founded by Trump: the AMF has not received a registration request
“By continuing to blow the cryptocurrency bubble, Trump is potentially contributing to major financial risk. We remember that the banking crisis of 2023 was largely attributed to speculation,” warns Alexandre F. Roch, full professor and director of the Department of Finance at ESG UQAM.
Three ethical risks arise according to him: Trump could generate profits at the expense of his supporters, obtain them with taxpayers’ money and also promote an asset sometimes used for tax evasion.
In recent days, Donald Trump, the 47e President of the United States, launched a virtual token by foaming it. “There are $200 million TRUMP dollars available on day one and will increase to a total of $1 billion TRUMP dollars over three years,” the meme’s official website reads.
His wife Melania followed him.
Alexandre F. Roch, professor of finance at UQAM and specialist in cryptocurrencies.
Photo taken from LinkedIn
However, these “memecoins”, that is to say these tokens “which have no real value”, and which are launched “for pleasure”, according to Martin Nolet, business lawyer and president of Beaux Jetons , are highly volatile and risky.
After peaking at nearly US$75, the value of the Trump meme collapsed to US$40.
Table taken from CoinMarketCap
Melania’s meme reached nearly US$14, before falling to US$5.40 on Monday.
Table taken from CoinMarketCap
More than $13 billion
As of Monday afternoon, Trump’s token had a total valuation of $11.5 billion and his wife Melania’s had a total valuation of $1.5 billion, according to CoinMarketCap.
“More than 80% of token Trump initials are owned by him or his team. Some of his relatives have already made a profit!” analyzes Adelphe Ekponon, assistant professor at the University of Ottawa and co-author of a study on cryptos.
These tokens “do not have any technological innovation projects behind them,” he emphasizes.
Adelphe Ekponon, assistant professor at the University of Ottawa and crypto specialist.
Photo taken from the University of Ottawa website
Among our neighbors to the south, we are already questioning this model.
“He (Donald Trump) is launching a major new multi-billion dollar venture in the burgeoning cryptocurrency industry, where he has the deepest conflict of interest between what he seeks to achieve and his regulatory duties,” denounced Norman Eisen, former ethics advisor to the Obama White House Washington Post.
The AMF advocates caution
Interviewed Monday by The Journalthe Financial Markets Authority (AMF) said it had not “received any request for registration or exemption from these platforms”.
“We have therefore not studied their business model and, consequently, we cannot comment on the question of whether or not they would trigger the obligations of securities regulations,” summarized Sylvain Théberge , spokesperson for the financial markets watchdog.
Sylvain Théberge, spokesperson for the Financial Markets Authority.
The AMF recalls that there are “significant risks” linked to trading platforms that are not registered.
“It may be that these platforms have shortcomings, particularly in terms of secure management of client funds, custody of assets, protection of personal information and measures against market manipulation,” concludes Mr. Théberge.
► The list of platforms that have submitted a pre-registration commitment to the AMF are ici. Crypto transactions are not covered by Deposit Protection.
