Mark Hayes is Associate Director of Cryptocurrency and FinTech at Applicant Education Fund and Americans for Financial Reform Educating Fund.
Days before he was sworn into office, Donald Trump and his family launched a new cryptocurrency token — known informally as a meme coin — called $TRUMP, as the cryptocurrency industry held an inaugural ball. Despite scant details about the coin’s value, use, or risks, trading took off, sending the price of the coin skyrocketing. At least on paper (or on blockchain), the Trump family and its companies are now several billion dollars richer. Not to be outdone, First Lady Melania Trump also launched her own meme coin. Meanwhile, Ivanka Trump is distancing herself from anything Ivanka Unauthorized Currency.
During his campaign, Trump promised to make the United States the “crypto capital of the planet” after his crypto brethren poured more than $130 million into electing a crypto-captive administration and Congress. Trump took advantage Pro-coding assistants for organizational positions The federal government has issued pro-crypto executive orders to create a White House Cryptocurrency Working Group and prioritize cryptocurrencies across the government. What’s more, the president-to-be has launched a Trump dollar coin: part vehicle for personal profit, part playground for mocking federal ethics rules, and part pledge of allegiance to crypto-fascism. It’s a move that could not only upset Trump’s supporters, but could also significantly erode the democratic process.
Let’s back off. In case you’re wondering, a “meme coin” is a token based on little more than an online image, logo, or passing social trend. The cryptocurrency industry says it is a type of digital collectible. Beautifully printed on Trump Coins Website It notes that the coins “are not intended to be, or be the subject of, an investment opportunity, investment contract, or security of any kind.” Popular meme coins include Dogecoin (a crypto token based on an image of a dog, originally introduced as a parody of cryptocurrencies) and several tokens based on the controversial alt-right mascot Pepe the Frog.
Another recent example is $HAWK, fronted by Haley Welch, known as the “Hawk Twah” girl (for her delightful description of an intimate act during a street encounter).
The meme doesn’t even claim to do anything (unlike other crypto assets, which still have almost no practical uses other than… Drug money laundering or tax evasion). Most of them are ultimately worthless; Many are outright “catch-ups” that lure retail investors with hype, inflating value, only for insiders to cash out and leave others holding the bag — as was the case with $HAWK, which fell 90 percent after its launch.
The fine print of $TRUMP requires coin purchasers to give up their rights to sue, a remedy that many holders of $HAWK coins are now seeking. Instead, they will have to submit to forced arbitration.
The cryptocurrency industry is rife with fraud, but even by their own standards, memes are shamelessly fraudulent. Serious crypto proponents — including those who blame or mischaracterize the Biden administration’s efforts to regulate cryptocurrencies and protect investors as the real problem — have sought to publicly dismiss cryptocurrencies as not what the cryptocurrency industry is really about.
A crypto lobbyist He said POLITICO That Trump’s $meme was “a horrific look at an industry that’s already trying to prove that we’re not a bunch of hucksters, scammers, and scammers.” However, many cryptocurrency enthusiasts, including avowed Trump supporters, often privately admit on X, on LinkedIn, and in various other corners of the internet that most cryptocurrency markets consist of meme coins or things like them.
In a fair or rational world, the first order of business for the president’s promised crypto working group would be to focus on this Trump coin. This project presents a staggering number of potential conflicts of interest and points to a financial regulatory apparatus that preys on Americans rather than protecting them.
Here are some concerns among many:
What is the use case for $TRUMP? If this were truly a collectible, like a baseball card, it’s hard to imagine a practical use for $TRUMP other than to enjoy it (and you can enjoy the image online and the sideshow for free). You can enjoy them and sell them to other collectors, but you cannot use them in the economy. You could have Mickey Mantle card worth $12 millionBut you can’t buy a cheeseburger with it. What does it mean to be the cryptocurrency capital of the world if it relies solely on gambling on unregulated internet memes?
If the Trump dollar were a real financial instrument, would any financial regulator nominated by Trump take on the president? If memes are truly financial instruments of value and meaning to the economy, financial regulators must ensure that token issuers disclose risks, that memes meet minimum standards to protect investors, and that tokens are not subject to market manipulation. the The Trump Organization owns 80 percent of Trump’s money coins. Will the Trump-nominated regulators side with investors or kowtow to a president who demands complete obedience?
Will the cryptocurrency legislation proposed by Congress hold the industry accountable, or will it just normalize bad behavior, including Trump’s coin issuance? The cryptocurrency industry is calling on Congress to pass new legislation to slightly regulate cryptocurrency markets, including cryptocurrencies like TRUMP, in place of existing financial rules. Will the president’s support for this type of bill depend on whether it hurts or helps his personal investments?
Could Trump’s dollar purchases violate ethics rules or the Constitution? Purchasing a Trump dollar for a dollar arguably gives foreign governments and special interests a virtual and almost anonymous way to curry favor with the president, anytime, anywhere. Each investor helps drive up Trump’s price and thus enrich the president. The Constitution prohibits foreign leaders from giving such gifts without congressional approval, but it would be nearly impossible for the public to discover whether Vladimir Putin, Kim Jong Un, or any other leader bought Trump out. Will financial regulators, ethics watchdogs, or Congress prevent the president’s cryptocurrency ventures from becoming a vehicle for corrupt pay-to-play politics? Or will they benefit from the madness themselves?
Trump, more than ever, has become an incredibly recognizable brand – from trainee To two successful offers for the position. It has also been linked to a series of questionable consumer products and investment opportunities.
There are defunct airlines and bankrupt casinos. Trump golf courses, high-rise hotels, and apartment developments; eyebrow-raising products like Trump-endorsed Bibles and gold sneakers; And now this.
It is alleged that these projects often robbed them of their enthusiastic customers. For example, Trump University paid $25 million to settle the charges That her real estate classes were actually commercials that deceived her students (without admitting guilt) weeks before he was sworn into office in 2017.
But the crucial difference between the previous polemics and Trump’s cryptocurrency scheme is that it aligns with the interests of their wealthy brethren who want to seize the reins of government to make themselves richer. The cryptocurrency industry, led by companies like Coinbase and Ripple, wants any action or vote on cryptocurrency matters – or even the opinions of potential candidates on cryptocurrency matters – to be treated as a political litmus test. And they succeed.
Before the winter break, a lobbying campaign in the cryptocurrency industry thwarted the renomination of SEC member Carolyn Crenshaw. She was first nominated to the Democratic seat by Trump and received unanimous Senate support in 2017. While Crenshaw has expressed some concerns about the cryptocurrency industry’s practices, she has taken few official positions.
But the cryptocurrency industry has stood against it – including… An ominous box truck ad She was walking around Washington – not because she was a dissident, but because she did not prostrate enough before the almighty of cryptocurrencies.
The Trump administration is quickly working to fill its ranks with certain crypto people and companies to make this possible. NoCorporateCabinet.orga project led by the Demand Progress Education Fund and the Revolving Door Project, is tracking these numbers, and has already identified several potential candidates with potential conflicts of interest, including wealthy businessmen like David Sachs (who is set to be the cryptocurrency czar, Paul Atkins (Trump’s nominee to lead the Securities and Exchange Commission), and Howard Lutnick (nominated to lead the Commerce Department).
Capturing the power of cryptocurrency has implications beyond cryptocurrencies. If the crypto bros get their way, it means the government has little interest in protecting investors, preventing fraud, holding companies accountable, and making sure people don’t get scammed by big banks, Wall Street, or financial apps.
If cryptocurrencies prevail and make their way into the broader financial system, the next crypto crash could reverberate throughout the economy and wipe out more than just exploited cryptocurrency investors.
Meanwhile, Trump and his family sit atop a pile of Trump and Melania coins. His supporters may not be so lucky: One Trump coin buyer posted, “This is terrible, my life is over” on Reddit, along with a photo showing they had received a Trump coin. Already lost Nearly $700,000 on their investment in Trump Meme, due to extreme fluctuations in the currency’s price.
If this is the cryptocurrency revolution, it sounds like another Wall Street scheme. Who will be left holding the bag?
