Trump’s new crypto coin sparks ethics concerns
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President Donald Trump has pledged to hand the management of his assets to his children, but his new crypto asset is raising particular concerns.
PHOTO: REUTERS
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WASHINGTON – US President Donald Trump’s launch of a crypto
Mr Trump has pledged to hand the management of his assets to his children, but the crypto asset is raising particular concerns due to its ability to quickly attract billions of speculative dollars with little transparency.
The companies behind the “meme coins” $Trump and $Melania, for First Lady Melania Trump, said they are not investments or securities but are an “expression of support”. The 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 where any value is arguably tied to his presidency.
The companies behind the Trump token – CIC Digital, an affiliate of the Trump Organisation, and Fight Fight Fight, co-owned by CIC Digital – collectively own 80 per cent of the tokens, meaning that Trump-linked businesses could have gained US$8 billion (S$10.9 billion) worth of crypto over the weekend.
Ms Danielle Brian, head of the watchdog group Project On Government Oversight, said Mr Trump’s moves into crypto are concerning given the industry’s loose oversight. Besides being “a blatant financial conflict of interest on behalf of the president... it is deepening 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.
Prominent crypto investor Nic Carter said on social media that the creation of personal meme coins “opens the door to secretive foreign buyers trying to curry influence with our leaders”.
Some Democratic US lawmakers echoed the national security concerns and conflict-of-interest worries.
“Anyone globally, even individuals who have been sanctioned by the US or banned from our capital markets, can now trade and profit off of $Trump through various unregulated platforms,” wrote the top Democrat on the US House Financial Services Committee, Representative Maxine Waters.
Meme coins typically refer to small, extremely volatile cryptocurrencies, often named after online jokes or trends. While supporters hope the tokens will rise as the memes go viral, most have little value.
Both the Trump tokens’ websites avoid using the word cryptocurrency – referring instead to “fungible crypto assets” and marketing them as memes.
University of Sussex finance professor Carol Alexander said the two tokens were functioning more like fan tokens that took off in 2021 and would likely become a barometer for support of the couple.
Crypto markets were buoyant on Jan 20, with bitcoin hitting an all-time high as investors anticipated Mr Trump’s crypto-friendly policies.
Some said Mr Trump’s coin was a game changer.
“The fact that a president is doing this brings some sort of legitimacy to the space and I think just means that the industry is moving ahead in a way it hasn’t for the last 10 years,” said Mr Paul Howard, senior director at crypto market-maker Wincent. REUTERS
