On Monday, the 220 winners of a cryptocurrency contest were informed to anticipate an email containing what was described as “the most exclusive invitation in the world.” As a result of their significant financial investments, some totaling millions of dollars, these individuals earned the opportunity to attend a private gala with Donald Trump at his Washington, D.C. golf club later this month. This event reflects Trump’s ongoing practice of leveraging his political connections for personal benefit, a pattern that has raised eyebrows throughout his political journey, which has included various conflicts of interest.
Concerns surrounding Trump’s involvement in cryptocurrency arise from his history of entanglements, including real estate investments, media ventures, merchandising, and questionable gifts, such as a $400 million plane from Qatar. These issues have prompted warnings from ethics watchdogs for over a decade. His engagement in the crypto sector represents a notable escalation of these conflicts, as it involves utilizing his presidential influence for personal gain, potentially inviting foreign interactions and operating within an industry that he has the power to deregulate. This situation intertwines Trump’s dubious business practices with an often opaque and fraudulent sector.
Auctioning Off Influence
Trump’s transition from a cryptocurrency skeptic to a participant in the industry raised alarms among advocates for ethics and transparency. Critics feared that, if reelected, he could enact crypto-friendly policies that would financially benefit him directly. The sale of direct access to the presidency through a cryptocurrency initiative heightened concerns about political corruption and influence-peddling, especially since the identities of the contest winners remain undisclosed.
The contest rules indicated that the top 220 purchasers of the $TRUMP cryptocurrency, showcased on a public leaderboard on its website, would receive an invitation to dine with Trump. The top 20 individuals would enjoy even closer access at a VIP reception. However, the leaderboard only displayed usernames and crypto wallet addresses, lacking any identifiable information about the participants. Additionally, winners could write any name they wished on the invitation, further complicating the guest list.
Democrats and ethics organizations have voiced significant worries about the contest potentially allowing foreign entities to gain influence over Trump by investing in his cryptocurrency. Preliminary assessments of the $TRUMP leaderboard indicated that a notable portion of top buyers utilized foreign crypto exchanges that restrict U.S. users, suggesting that some winners may not even be American residents. Notably, the wallet belonging to the leading $TRUMP investor, who possesses over $18 million in the coin, has been associated with Justin Sun, a Hong Kong-based crypto entrepreneur charged with fraud by the SEC in 2023, although the investigation has since been suspended under Trump’s administration. Sun has also invested heavily in the Trump family’s other crypto ventures and serves as an advisor to a company controlled by Trump’s sons.
Moreover, foreign-linked investors have shown interest in the $TRUMP coin beyond this contest. Recently, a small tech firm known as GD Culture Group, which has ties to China and operates a TikTok e-commerce business, announced it had secured $300 million in funding to acquire $TRUMP coins. This acquisition aligns with Trump’s deliberations on the potential ban or forced sale of TikTok within the U.S.
The Trump Family Business Is No Longer Just Real Estate
The Trump family’s engagement in cryptocurrency is a relatively new phenomenon. Since early last year, the Trumps have immersed themselves in the crypto market. During his presidential campaign, Trump actively courted crypto investors, becoming the first candidate to accept cryptocurrency donations and pledging to establish the U.S. as the “crypto capital of the planet” during a Bitcoin conference in July. In the latter part of that year, he revealed the formation of World Liberty Financial, a crypto venture controlled by the Trump family that has raised approximately $550 million.
Following his election victory, Trump became more entrenched in the crypto sector, participating in the development of memecoins that are subject to volatile trading patterns. The $TRUMP cryptocurrency, along with a $MELANIA coin, debuted shortly before his inauguration, with the value of $TRUMP initially soaring to around $75 before a subsequent downturn, only to gradually recover after Trump announced that top purchasers would enjoy an exclusive dinner with him.
Since then, companies linked to Trump have expanded to launch another cryptocurrency named USD1, a somewhat vague “Trump reward points” initiative, and an Exchange-Traded Fund (ETF). Recently, Eric Trump announced plans for a Bitcoin mining firm under the family’s control to go public. The structure of these ventures is complex, resembling a series of nested entities. For instance, Trump does not directly own the company that created the $TRUMP memecoin; instead, the Trump Organization controls a firm named CIC Digital LLC, which, together with another entity, Fight Fight Fight LLC, manages and profits from the coin’s trading. These two LLCs also hold approximately 80% of the coin’s reserves, currently valued at over $2 billion.
The rapid expansion of the Trump family’s crypto ventures is striking, especially considering Trump’s previous characterization of Bitcoin as a “scam” in 2021 and his call for increased regulation. Although significant developments have transpired in the cryptocurrency landscape since then, the most relevant aspect here is that Trump now stands to gain financially from this industry.
Backlash Against Trump’s Deregulation of Crypto
As the Trump family has developed its crypto businesses, the Trump administration has simultaneously advocated for deregulating the industry, appointing a pro-crypto chairperson for the SEC. In April, the Department of Justice disbanded its cryptocurrency fraud investigations unit to comply with an executive order from Trump favoring the crypto sector. These deregulation efforts occur amidst a landscape still plagued by scams and only a few years after the scandal involving Sam Bankman-Fried’s mismanagement of the FTX exchange, which resulted in one of the most significant financial crises in recent memory.
The potential relaxation of regulations and support for the crypto industry raises concerns that extend beyond mere corruption and financial ramifications. The expansion of Bitcoin mining operations across the U.S. has also led to issues related to energy supply, environmental impact, and noise pollution, all of which fall under regulatory agencies that Trump can influence. Some Democratic lawmakers and even a few Republicans have voiced opposition to Trump’s apparent conflicts of interest, with some allies suggesting that the dinner event crossed an ethical line. Connecticut Senator Richard Blumenthal took formal action last week by initiating an ethics investigation into Trump’s crypto activities.
Blumenthal emphasized in a letter that “President Trump’s financial connections to the $TRUMP coin, along with the use of the White House to facilitate competitions that inflate its value, represent an unprecedented pay-to-play scheme granting presidency access to the highest bidder.” Trump’s crypto initiatives have also obstructed the progress of a significant regulatory bill known as the Genius Act, which had previously enjoyed bipartisan support. Senate Democrats, alongside three Republican senators, voted against a procedural motion that would have allowed the bill to advance in its current form, arguing that it required stronger safeguards to avert the types of conflicts Trump has been creating.
In a recent speech opposing the bill, Massachusetts Senator Elizabeth Warren expressed her shock at Trump’s rapid efforts to capitalize on his presidential position for personal financial gain, stating, “The biggest corruption scandal in modern history is unfolding right now and no one is paying attention to it.”
