The cryptocurrency industry, once dismissed by Donald Trump as a “scam,” has reportedly become a significant source of personal profit for the U.S. president in his second term. This shift, accompanied by a rapid loosening of crypto regulations, has shocked observers and drawn sharp accusations of unprecedented corruption.
Trump’s Crypto Earnings
The depth of President Trump’s involvement in the crypto sector has become increasingly evident. Last month, crypto billionaire Justin Sun publicly displayed a $100,000 Trump-branded watch, earned for buying $20 million of the $Trump memecoin. This qualified him for a private dinner at Trump’s Virginia golf club.
The “much-hyped” May 22 dinner and a White House tour the next day for 25 leading memecoin buyers reportedly aimed to spur $Trump sales, generating an estimated $148 million for Trump and his partners, much of it from anonymous and foreign buyers. The $Trump memecoin, launched days before Trump’s inauguration, yielded tens of millions for Trump and partners. Memecoins are defined as speculative tokens, often based on jokes, with no inherent value, carrying high risk due to volatile prices.
Conflicts Spark Outcry
Trump’s private events involving $Trump purchasers have sparked criticism from ethics watchdogs, former prosecutors, and scholars who accuse him of exploiting his office for personal gain. Critics argue that Trump’s profiting from his presidential memecoin is a clear example of the founders’ fears of self-enrichment. Harvard professor Steven Levitsky, former federal prosecutor Paul Rosenzweig, and Princeton University political history professor Julian Zelizer have all expressed concerns about Trump’s financial interests and the potential benefits to the nation.
Regulatory Rollbacks
Trump’s crypto dealings are unfolding amidst a rapid deregulatory agenda for the digital asset sector. Since he took office, regulations have reportedly been loosened at the SEC, Justice Department, and other agencies, undoing Joe Biden’s crypto policies. The SEC has reportedly eased regulations and paused or ended 12 crypto fraud cases.
For instance, three of Justin Sun’s crypto companies, charged with fraud by the SEC in 2023, had their cases paused in February, citing “public interest,” with reported settlement talks. A Justice Department memo in April reportedly announced closing a national crypto enforcement team, citing a policy shift spurred by a “pro-crypto Trump executive order” in January. Richard Briffault, a Columbia law professor, noted the Department of Labour nixed a Biden-era “extreme care” warning about 401K plans investing in crypto, calling it “another sign of the Trump administration’s embrace of crypto.”
Worsening Scandals
Ethics watchdogs and former prosecutors are concerned that the Trump administration’s eased crypto oversight could worsen crypto scandals and conflicts of interest. Paul Pelletier, a former acting chief of the Justice Department’s fraud section, argued that the SEC’s recent dismissal of its lawsuit against Binance for mishandling customer funds was a result of lax enforcement. High-profile crypto deals, such as a $2 billion investment by Abu Dhabi financial fund MGX in Binance, involve overseas firms with U.S. regulatory issues. This comes despite Binance pleading guilty in 2023 to violating U.S. money-laundering laws and a $4 billion fine. Binance’s ex-CEO, Changpeng Zhao, also pleaded guilty to violating the Bank Secrecy Act.
Congressional Pushback
Critics in Congress have intensified their scrutiny. Democratic Senators Richard Blumenthal and Jeff Merkley, along with Representative Jamie Raskin, launched enquiries. Blumenthal told The Guardian, “With his pay-for-access dinner, Trump put presidential access and influence on the auction block,” adding, “The scope and scale of Trump’s corruption is staggering. I’ll continue to demand answers.”
Senator Jeff Merkley declared, “Trump’s crypto schemes are the Mount Everest of corruption.” Merkley, Schumer, and 22 other Democrats introduced a bill to curtail “Trump-style crypto corruption,” banning federal officials from profiting from “shady crypto practices.” Former Republican Congressman Charlie Dent stated, “Nobody should be allowed to use their public positions while in office to enrich themselves” and “A member of Congress would not be permitted to engage in the kind of memecoin activities that the president has been doing.”
Administration’s Defence
Critics argue that Trump’s public embrace of crypto ventures and deregulatory agenda, exemplified by the White House’s “crypto summit,” are “dwarfed” by his financial stakes in the crypto industry. They argue that Trump’s financial stakes in the industry while determining government regulation are unprecedented in modern history, and that ethics laws and norms should have been designed to prevent conflicts of interest.
