The latest headlines from our reporters across the US sent straight to your inbox each weekday
Your briefing on the latest headlines from across the US
Your briefing on the latest headlines from across the US
Donald Trump once called cryptocurrency a “scam.” Now ethics experts fear the president may be carrying out a rules-bending crypto scheme of his own by holding onto crypto assets while serving in the White House.
Federal ethics rules bar conflicts of interest involving financial holdings. A 2022 opinion from the Office of Government Ethics argued federal employees should remove themselves from crypto issues “when there is a real possibility that the matter will result in a gain or loss to the employee’s digital assets.”
As an example, the office pointed to a federal employee hypothetically pushing for U.S. currencies to back certain crypto coins that could profit the employee.
Such warnings would seem to apply to Donald Trump. An affiliate of his Trump Organization is one of the main owners of $TRUMP, an “official” Trump-themed crypto meme coin.
A 1980s-era exception to the rules, however, exempts presidents, leaving ethics observers fearful that Trump’s strongly pro-crypto agenda could result in self-dealing.
“If you’ve got a direct, personal financial connection to the crypto industries, there’s a self-interested motivation to create the easiest possible path for the crypto world,” Dylan Hedtler-Gaudette, the director of government affairs at the Project on Government Oversight, told The Intercept.
Trump administration Director of National Intelligence pick Tulsi Gabbard, perhaps considering these regulations, has said she will divest from her tens of thousands of dollars in crypto holdings if she’s confirmed.
The backers of the $TRUMP coin have insisted the product, which is hosted on the Solana blockchain network, is merely an “expression of support for, and engagement with, the ideals and beliefs embodied by the symbol ’$TRUMP’ and the associated artwork,” and not an investment.
However, for something that’s not an investment, the coin has attracted a deluge of investors, with a theoretical market cap of more than $5 billion as of Monday afternoon.
Democrats have warned that Donald and Melania Trump’s ownership of separate, name-branded crypto offerings raises alarm bells that the president and First Lady could carry out a “rug-pull” scam and cash in on their ownership.
“We write with deep concern about the decision by President Trump and First Lady Melania Trump to launch two meme coins, $TRUMP and $MELANIA, that allow them to earn extraordinary profits off his Presidency,” Senator Elizabeth Warren and Rep. Jake Auchincloss wrote in a letter to regulators last week.
“These coins do not create new faster, cheaper, and safer payments [guard] rails. These coins do not help people borrow more affordably. They do not improve the financial system in any way for consumers,” they noted.
The crypto industry spent over $100 million dollars backing Trump and other fellow pro-crypto candidates this cycle, and Trump’s promises to loosen regulation and establish a U.S. strategic Bitcoin reserve have helped push Bitcoin prices to record highs in recent days.
The Trump administration, given its extensive ties to the business world, has an above-average potential for conflicts of interest.
Billionaire Elon Musk, who is leading Trump’s Department of Government Efficiency project to slash federal spending, owns multiple companies that do business with the federal government and would see major impacts from regulatory changes.
