Why Trump’s Meme Coins Have Alarmed Both Crypto Insiders And Legal Experts – Casson Living – World News, Breaking News, International News

Why Trump’s Meme Coins Have Alarmed Both Crypto Insiders And Legal Experts – Casson Living – World News, Breaking News, International News

With Donald Trump winning the presidency in November, many within the cryptocurrency community celebrated, buoyed by his promises to support deregulation and embrace crypto entrepreneurs. Just ahead of his inauguration, key players in the crypto sector gathered in Washington for the Crypto Ball, reveling in their new influence within the political landscape.

Yet, amidst the festivities, Trump surprised many by announcing the introduction of a new cryptocurrency called TRUMP. This asset, classified as a meme coin, has no inherent value, with its price driven purely by market dynamics. Supporters of Trump, along with opportunistic traders, have generated billions in trading volume, energized by loyalty, enthusiasm, and the promise of quick returns. The token’s creators—companies linked to the Trump Organization—are said to have reaped billions in potential profits. The day following its launch, Melania Trump unveiled her own meme coin, which also exhibited extreme price volatility. As of Wednesday, TRUMP had achieved the status of the 25th most valuable cryptocurrency worldwide, per CoinMarketCap, trading around $43, down significantly from its peak of $75.

Discover More: Implications of Trump’s Victory for Cryptocurrencies.

The rise of Trump’s meme coins has sparked significant interest in the cryptocurrency market, attracting many newcomers. Some view these coins as a testament to Trump’s commitment to the crypto space and its growth. However, a segment of the crypto community has reacted negatively, perceiving it as a blatant attempt to exploit his supporters for profit. With Trump’s team controlling at least 80% of the token’s total supply, they hold substantial sway over its market valuation. While they are unable to cash out their holdings for several months, any such action could severely impact the market, leading to losses for average investors.

Veterans in the cryptocurrency field express concerns that these tokens could heighten public distrust towards an industry already plagued by fraud and deception. “The crypto landscape has empowered someone whose first move appears to exploit the susceptibility to corruption within crypto,” remarks Angela Walch, a researcher and writer specializing in cryptocurrency. “That’s just embarrassing.”

Trump has downplayed his role in the coin’s development, declaring at a January 21 press conference: “I don’t know much about it aside from the fact that I launched it.” The Trump Organization did not immediately respond to requests for comment, and representatives from the White House declined to provide statements.

Meanwhile, lawmakers and legal analysts are raising ethical and geopolitical concerns regarding these tokens, suggesting they could facilitate bribery and conflicts of interest. “These coins could allow him to gain financial leverage from foreign adversaries, putting his personal interests ahead of American welfare,” states Puja Ohlhaver, a lawyer affiliated with Harvard’s Allen Lab for Democracy Renovation.

Understanding Meme Coins

TRUMP and MELANIA serve as prime examples of meme coins: cryptocurrencies created by developers utilizing blockchain technology. Their value is largely derived from public perception and market demand. The teams behind these cryptocurrencies often harness popular memes to generate excitement that spreads rapidly across social media platforms. The underlying notion is that if memes can shape culture, creativity, and ideologies, they should also carry financial significance.

Notable examples include Dogecoin and Shiba Inu, with Dogecoin significantly influenced by tweets from Elon Musk, which have triggered substantial price increases. The lack of intrinsic value makes meme coins especially volatile and speculative, attracting investors hoping to time the market. Conversely, purchasing at market highs can lead to swift losses. Additionally, meme coins have been associated with alleged scams, resulting in major financial setbacks for investors.

Historically, Trump supporters have effectively used memes as marketing tools. During his presidential campaign, a group of content creators flooded social media with pro-Trump memes. Last summer, unofficial Trump-themed meme coins like Pepe (TRUMP) and Maga People Token (PEOPLE) varied in value, with some speculators viewing them as barometers for his electoral prospects.

Furthermore, Trump has a history of leveraging cryptocurrency for financial gain. He began selling NFT trading cards in 2022, reportedly earning millions, as documented in financial disclosures. In September, he announced the upcoming launch of World Liberty Financial, a cryptocurrency platform that remains in the works. As of 2025, meme coins continue to present a rapid avenue for aspiring crypto entrepreneurs to earn income.

TRUMP’s Trading Debut

On January 18, just two days before his inauguration, Trump revealed his token through CIC Digital LLC, a subsidiary of the Trump Organization, during the ongoing Crypto Ball. This unexpected announcement caught the industry off guard. Nick O’Neill, a crypto entrepreneur at the event featuring Snoop Dogg and Speaker Mike Johnson, shared a video on X, noting that very few attendees were aware of the token’s introduction.

The following day, a buying and selling frenzy ensued, leading to significant repercussions. The Solana blockchain supporting the token and Coinbase, the exchange for trading the coin, faced considerable transaction delays. “We did not expect this level of demand,” tweeted Coinbase CEO Brian Armstrong.

Within a single day, the team behind the token, led by CIC Digital, reported holdings valued at approximately $51 billion on paper. (This figure is somewhat misleading, as attempting to cash out would likely cause the price to drop.) On the same day, Melania Trump launched her meme coin, MELANIA, which subsequently caused TRUMP’s market cap to decrease significantly as traders redirected their investments. Following MELANIA’s launch, TRUMP fell from over $70 to around $45 in just one hour. A fraudulent BARRON memecoin, not associated with Trump’s youngest son, also briefly reached a $460 million market cap before collapsing by 95%.

Some of Trump’s most fervent crypto advocates accused him of exploitative practices surrounding the coin’s launch. The core principle of crypto is decentralization; however, Trump’s team controls at least 80% of the TRUMP token’s supply. Another blockchain analytics firm, Bubblemaps, found that 89% of MELANIA’s tokens were held in a single wallet. Conor Gregor, a Coinbase executive, reported that Trump’s team had amassed $58 million solely from trading fees.

“Trump’s credibility has been completely undermined,” stated investment manager Michael A. Gayed. Anthony Scaramucci, Trump’s former communications director and a crypto proponent, added: “It’s hard to believe that this is genuinely beneficial for society.”

“The industry is undergoing significant self-reflection,” notes Walch. “Sure, we gained influence, but did it align with the original goals we set out to achieve?”

Concerns Over Ethics and National Security

Critics beyond the crypto industry are raising ethical concerns. Trump is now directly engaged in a sector he is responsible for regulating. (The affiliated companies assert that Trump tokens “are not investments or securities but rather an ‘expression of support.’”) Opponents argue that Trump’s financial interests in crypto could discourage him from enforcing regulations that might adversely affect the value of his tokens. Representative Ro Khanna, a California Democrat and notable crypto supporter, suggested on X that “Elected officials should be legally barred from owning meme coins.”

Some observers are concerned that these tokens could represent a national security threat, as they enable foreign entities to acquire substantial quantities of the token, potentially influencing Trump’s decisions. These actors could purchase tokens to gain favor or threaten to offload them, which could lead to a sharp decline in the token’s price. Using cryptographic techniques, they might even conceal their identities from everyone except Trump, asserts Ohlhaver from the Allen Lab.

The Emoluments Clauses of the Constitution were established to prevent such conflicts of interest, prohibiting a President from capitalizing on their office to enrich themselves. Historically, gift-giving was a prevalent corrupt practice among European leaders and diplomats. Some argue that since Trump’s token launch occurred before his inauguration, he was acting as a private individual. “It’s easier for them to launch these BEFORE he officially takes office,” remarked crypto journalist Zack Guzmán on X. “Claiming Trump is profiting from the presidency and violating the Emoluments Clause would have been much more straightforward if it hadn’t been.”

Nonetheless, Ohlhaver contends that as long as Trump holds ownership of the tokens, a serious conflict of interest persists. “He still owns tokens that could appreciate in value if a foreign adversary artificially inflates them,” she states. Ohlhaver also believes that Trump’s meme coin undermines public understanding of currency itself. “In an era of social media and global networks, it’s alarmingly easy to exploit one’s influence to create a new form of currency and give it legitimacy,” she explains. “It’s essential to protect our national public goods and ensure they serve the collective interests of society, rather than benefiting a select few at the expense of the broader population.”

Andrew R. Chow’s book on cryptocurrency and Sam Bankman-Fried, Cryptomania, was published in August.