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Trump’s Meme Coin Debacle Reveals a President Ushering in a New Era of Institutionalised Grift

Donald Trump and his associates are already cashing in handsomely from his presidency

Photo: Vuk Valcic / Alamy

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Donald Trump, now officially the 47th President of the United States, is well known for stamping his name on things. The Trump brand spans everything from steaks to vodka to sneakers, tower blocks to fraudulent universities. However, on January 17th, Trump added his name to yet another dubious commodity. The launch of the $TRUMP meme coin marked his entry into the lawless world of cryptocurrencies. 

First, a brief background explainer. Unlike other financial assets, cryptocurrencies are untethered from anything tangible. Transactions are recorded on a virtual ledger known as the ‘blockchain.’ Like a wild-west casino, the industry is rife with fraud and abuse. The US’ Federal Bureau of Investigation (FBI) found that $5.6 billion had been reported lost in crypto scams in 2023 alone, with the real unreported number likely much higher than that.

So what’s a meme coin? There are a few different varieties of crypto out there – so-called stablecoins, for example, are pegged to the US dollar – but meme coins are the most volatile of the bunch. Prominent examples include ‘Dogecoin’ (an Elon Musk favourite, based on an old meme depicting an expressive Shiba Inu) and ‘Fartcoin,’ which saw a massive price surge in the wake of Donald Trump’s presidential victory in November – more on that later. 

For now, understand that buying a cryptocurrency, especially a meme coin, is like placing a bet that you can sell it off for more than you bought it for. Those who create the coins tend to hold the cards. 

Enter Trumpcoin. Since launch, it’s made the new President a paper fortune. Here’s how it works:

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Trump and Dump?

As the crypto writer Molly White rightly points out, Trump did not directly pocket such a ludicrous sum. It’s a nominative value. Accurately valuing illiquid meme coins in terms of regular money is finicky business. Trump certainly made a large sum directly from selling off the initial 200 million coins (the lack of detailed financial disclosure requirements means we don’t know how much), but we can’t assume that the price will remain stable, or that Trump will be able to immediately liquidate all of his remaining holdings. 

As White writes: “People regularly try to extrapolate the sale price of a tiny number of tokens to their often massive supplies, assuming that if you can sell one token for $1, how hard could it be to find eager buyers at that price for another trillion or so tokens?” It just doesn’t work that way, and there’s unfortunately no way to be sure, at the time of writing, exactly how much Trump just made (or how much he stands to make) in real terms. 

Nevertheless, Trumpcoin has parallels with what’s known in the crypto world as a ‘pump-and-dump’ scheme. That’s when the creators or major holders of a coin artificially inflate its value through marketing, hype, or manipulation. Then, they sell their holdings at inflated prices, causing a rapid price collapse.  

Trumpcoin is largely (80%) owned by the President’s direct affiliates, giving him significant control over supply – and the potential to sell at peak prices. It’s unlikely to be a coincidence that he launched the coin just before his own Presidential inauguration and used his massive public platform to encourage people to buy it and drive the price up. There’s currently no evidence that Trump’s companies have sold off large amounts of tokens (as you’d eventually expect in a pump-and-dump), but he’s certainly got time and the opportunity to do so. 


Buy Trumpcoins, Get Favours?

Looking past the fact that Trump has likely just brazenly siphoned money from his admirers (not for the first time), it’s more important to consider the glaring risks of Trumpcoin to basic democratic principles. Essentially, this is a wide open door for dark money

Many cryptocurrencies, including meme coins like Trump’s, operate on public blockchains. While transactions are transparent, they are pseudonymous, meaning individuals can make payments without revealing their identities. Unlike traditional financial systems that require adherence to anti-money laundering (AML) and know-your-customer (KYC) regulations, many meme coins and small cryptocurrencies operate in unregulated or lightly regulated spaces. A Trump meme coin could almost certainly bypass financial oversight, making it easier for individuals to funnel money illicitly.

It essentially means that anyone, anywhere in the world, can directly give money to the President of the United States with extremely limited transparency or accountability.

Moreover, the speculative and volatile nature of meme coins could amplify the problem. If the coin’s value were tied to endorsements or policy stances, the line between legitimate market activity and bribery could blur further. The result is a financial mechanism that erodes what little remains of public faith in American democracy, allowing the ludicrously wealthy – not to mention foreign governments – to once agan bypass the safeguards designed to ensure fairness. 

As if money in politics wasn’t bad enough (I’ve written previously about how oligarchs finished the job started in Citizens United at this last election), Trump has yet again taken it to new extremes. 

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Grift, Institutionalised

Perhaps worst of all, Trump’s incoming regime is about to take what limited regulation exists for cryptocurrencies and consign it to the political dustbin. It means that any accountability that might have once existed for a project like Trumpcoin (or Fartcoin, as mentioned earlier) – the rules previously enforced by the Securities and Exchange Commission, for example – are likely no longer going to be an obstacle. 

According to a report by campaigners at Public Citizen, crypto companies dominated corporate election spending in the 2024 US election cycle. Nearly half of all corporate funds in this past election (44%), over $270 million, came from crypto backers. Across party lines, pro-crypto candidates were boosted and crypto skeptics were targeted. 

Lisa Gilbert, Public Citizen’s Co-President, said in a statement that “the amount of money spent by the crypto industry this cycle is unprecedented, and sets a terrifying example of influence-peddling that must not be replicated.” 

Back in 2019, Trump claimed that he was “not a fan of Bitcoin and other Cryptocurrencies, whose value is highly volatile and based on thin air.” By 2024, he’d changed his tune. He became the first presidential candidate to accept digital assets for campaign donations, claimed he’d make America “the Bitcoin and cryptocurrency capital of the world,” and made a series of grandiose promises to crypto enthusiasts. 

The first and perhaps most important promise was firing Joe Biden’s Chair of the Securities and Exchange Commission (SEC), Gary Gensler – who was public enemy number one for the crypto community. Gensler’s notoriety was garnered simply by enforcing the law, opening up prominent lawsuits against major crypto players including Binance and CoinBase (among others) for offering up unregistered securities. 

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Gensler was gone on day one, and Trump is reportedly looking to get Senate approval for Paul Atkins, currently an advisor for financial firms and crypto companies, to replace him. Trump continued to signal his pro-crypto stance with the appointment of Howard Lutnick – previously the CEO of Cantor Fitzgerald and a banker for controversial crypto firm Tether – as Secretary of Commerce, and tech billionaire and crypto-enthusiast David Sacks as his “AI and Crypto Czar”. 

Trump has also pledged to establish a “National Bitcoin Stockpile”, using federal money to purchase large sums of volatile speculative assets and boost Bitcoin’s legitimacy. At the time of writing, the US Government already owns over 207,000 BTC. As reporters at The Lever revealed, the plans to expand the stockpile, likened by proponents to a new “Louisiana Purchase moment” are being pushed by the Satoshi Action Fund – a dark money group with ties to oil conglomerates and the Heritage Foundation.

Other promises include eliminating capital gains taxes on Bitcoin, ruling out the creation of a Central Bank Digital Currency (CBDC, essentially a fiat “digital dollar,” – these have been pioneered in China, and the UK is reportedly considering it as well), and supporting the right to ‘mine’ Bitcoin.

Famed British economist John Meynard Keynes once wrote that “when the capital development of a country becomes a by-product of a casino, the job is likely to be ill-done.” Trump’s foray into the world of crypto – both minting his own coin and unveiling his crypto-friendly regulatory strategy – reveals that uncontrolled speculation is once again exerting vast power over American life. 

It also shows how far democratic norms have fallen. The Emoluments Clause of the US Constitution restricts federal officials from receiving gifts, payments, or titles from foreign governments. Due to an abundance of caution, Jimmy Carter famously had to put his peanut farm into a blind trust to avoid conflicts of interest. Other past presidents, like Richard Nixon, went to great lengths to hide their corruption. 

As Melania Trump launches her own ‘meme coin’, and Trump’s sons Eric and Donald Jr. look poised to do the same, it signals the dawn of a new era of institutionalised grift, devoid of meaningful accountability. In Trump’s America, it’s all out in the open. 


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