In a recent development, Senators Adam Schiff (D-CA) and Elizabeth Warren (D-MA) have officially called for a federal ethics investigation regarding President Trump’s promotion of private access to investors in the TRUMP meme coin. This request comes in light of a notable spike in the token’s value following the announcement of this investment opportunity.
Legal Issues Surrounding TRUMP Meme Coin Access
In a correspondence dated April 25 to the U.S. Office of Government Ethics, the senators expressed concerns about the legality of selling presidential access in connection with digital asset investments. On April 23, Trump’s campaign revealed plans for an exclusive gala at Trump National Golf Club in Washington, D.C., inviting the top 220 holders of the TRUMP meme coin. The top 25 holders were promised VIP treatment, while all invitees would have the chance to hear from the president himself. The letter highlighted serious ethical and legal implications, suggesting that President Trump and other officials may be partaking in “pay to play” corruption by monetizing presidential access for personal gain and enrichment.
Following the announcement, there was an immediate market reaction, with the TRUMP token’s value increasing by about 60% within a day, resulting in over $100 million in new investments. Notably, an address associated with the Chinese-founded exchange HTX emerged as the largest investor, holding more than $13 million in tokens. However, the TRUMP team clarified that holdings on exchanges would not be considered in leaderboard standings. At the time of the announcement, the 220th largest verified holder had tokens worth approximately $420; this value surged to $18,480, with VIP access requiring a minimum holding of $1,422,732 to meet the president. The leading holder, identified as ‘Sun’, possesses $13,898,508 in TRUMP meme coins. Currently, the token’s price stabilizes around $12.40, reflecting a 71% increase from the $7 level prior to the gala announcement and establishing a market cap of $2.48 billion.
Concerns Regarding Foreign Investors in TRUMP Meme Coin Event
In addition to the dinner invitation, over $350 million has been funneled to entities linked to the president since the meme coin’s inception. The promises of exclusive access combined with the token’s rapid price increase have sparked alarm among ethics experts and lawmakers. Senator Schiff’s letter cautioned that the scenario could violate federal bribery laws and constitutional provisions regarding emoluments. The correspondence also noted that foreign involvement is a critical concern, as some investors seem to have made purchases through platforms like Binance, which typically restrict U.S. users. The Office of Government Ethics had issued guidance in 2023 that designated certain cryptocurrency holdings as disqualifying financial interests for federal employees; however, these regulations did not specifically address sitting presidents, thus creating a regulatory loophole relevant to the ongoing situation. Nonetheless, Trump’s representatives have countered this narrative, asserting that the president’s assets are managed by his family within a trust, thus denying any potential conflict of interest.
Expansion of Trump’s Crypto Ventures Beyond the Meme Coin
The TRUMP dinner offer coincides with a broader array of crypto initiatives associated with Trump. In March, the Trump family announced plans to launch USD1, a stablecoin developed by World Liberty Financial, a DeFi project partially owned by the Trump family. Since its introduction, USD1 has generated over $2 billion in tokens, contributing to a 30% rise in the stablecoin supply across Binance’s BNB Chain. Additionally, World Liberty Financial has engaged in intricate agreements with at least five other crypto projects, including Sui, Ethena, Ondo, and Tron. These arrangements involved projects purchasing large quantities of World Liberty’s coin in exchange for smaller amounts of their tokens. Furthermore, Trump’s sons, Eric and Donald Jr., have taken a minority stake in a new bitcoin mining venture named American Bitcoin, where Eric Trump serves as chief strategy officer, with plans for a public listing on the horizon. Trump Media & Technology Group, where Trump holds the largest share, has also announced the launch of crypto-focused exchange-traded funds (ETFs) in collaboration with Crypto.com, which will include a mix of cryptocurrencies and “Made in America” stocks.
Reactions to the TRUMP Meme Coin Gala Dinner
The combination of the meme coin’s impressive market performance and these initiatives has garnered scrutiny beyond standard campaign finance concerns, drawing criticism from governance watchdogs. Accountable.US referred to the arrangement as a “race to the bottom for presidential grifting,” while Senator Chris Murphy (D-CT) labeled the offering as unprecedented, stating, “the Trump coin scam is the most brazenly corrupt thing a President has ever done. Not close.” Senator Jon Ossoff (D-GE) termed President Trump’s gala invitation an “impeachable offense,” arguing that the president is granting audiences to those who purchase the meme coin, thereby directly benefiting himself. Although many Republican legislators have supported Trump’s pro-crypto stance, none have publicly addressed the TRUMP meme coin dinner. In January, Republican Senator Lummis (R-WY) expressed her approval of the meme coin’s entertainment value, though she noted her perspective might differ if it were marketed strictly as an investment. Senator Tommy Tuberville (R-AL) referred to Trump as the “Crypto President,” emphasizing the need for safeguarding markets from malicious actors.
Unlocking of Insider Tokens Related to TRUMP
Recently, insider tokens tied to the president have begun to unlock following an initial vesting schedule, with some tokens being sent to exchanges likely for sale. Only 10% of the total TRUMP token supply was made available to the public, with 80% retained by insiders and the remaining 10% reserved for liquidity purposes. The first significant unlock occurred on April 19, releasing approximately $311 million tokens, or roughly 4% of the total supply, to two insider wallets. Since that time, about 500,000 tokens, valued at around $6 million, have been unlocked daily, with the proceeds going to the same insider wallets. The other four wallets started receiving their vested tokens in July, with each receiving about $3 million tokens at the current price of around $12. The insider wallets are believed to comprise those belonging to the Trump family, as well as advisors and developers associated with the project. The gala dinner is slated for May 22, and as of now, the Office of Government Ethics has not publicly confirmed whether it will initiate the requested inquiry into the TRUMP meme coin.
