US President Donald Trump’s launch of a crypto token shortly before his inauguration on Monday creates new conflict of interest concerns, ethics experts and industry insiders said.
Mr. Trump has pledged to hand over management of his assets to his children, but cryptocurrency raises particular concerns because of its ability to quickly attract billions of speculative dollars with little transparency.
The companies behind the $TRUMP and $MELANIA “meme coins,” for first lady Melania Trump, said they are not investments or securities, but are an “expression of support.”
These tokens follow Trump-branded non-fungible tokens, sneakers, and a bible, among other items he has launched.
Ethics advisers and industry experts say this investment is different because his administration will regulate an industry in which he has a stake through the new token, and one whose value is arguably tied to his presidency.
The companies behind the Trump token, CIC Digital LLC, a subsidiary of the Trump Organization, and Fight Fight Fight LLC, co-owned by CIC Digital, collectively own 80% of the tokens, meaning Trump-related companies could have earned $8 billion in cryptocurrency over the weekend.
Danielle Brian, director of the watchdog group Project On Government Oversight, said Mr. Trump’s cryptocurrency initiatives are concerning given the sector’s lax oversight. In addition to being “a blatant financial conflict of interest on behalf of the president … it deepens his engagement in a world that raises real national security concerns,” she said.
Mr. Trump’s office did not respond to a request for comment.
Nic Carter, a prominent cryptocurrency investor, said on social media that the creation of personal currencies “opens the door to secret foreign buyers trying to exert influence over our leaders.”
-Some Democratic U.S. lawmakers have echoed national security and conflict of interest concerns.
“Anyone around the world, even individuals who have been sanctioned by the United States or banned from our financial markets, can now trade and profit from $TRUMP through a variety of unregulated platforms,” Maxine Waters wrote , the senior Democrat on the Financial Services Committee of the United States House of Representatives.
Meme coins generally refer to small, extremely volatile cryptocurrencies, often named after jokes or online trends. Proponents of these memes hope that their value will increase as the memes go viral, but most of them have little value.
Both Trump Token websites avoid using the word cryptocurrency – instead referring to “fungible crypto assets” and marketing them as memes.
Carol Alexander, a professor of finance at the University of Sussex, said the Trump and Melania tokens functioned more like fan tokens that took off in 2021 and would likely become a barometer of support for the couple.
Cryptocurrency markets were buoyant on Monday, with bitcoin hitting an all-time high as investors anticipated Trump’s pro-cryptocurrency policies.
Some said Mr. Trump’s coin was a game-changer.
“Having a president do this brings some sort of legitimacy to the space, and I think it just means the industry is moving forward in a way it hasn’t in the last ten years.” , said Paul Howard, senior director at crypto market specialist Wincent.
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