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The key to understanding Trump? It’s not what you think
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View image in fullscreenDonald Trump embodies dealmaking as the essence of a particular form of entrepreneurship. Every deal begins with his needs and every deal feeds his wants. He thus appears to be like other super-rich people: seemingly bottomlessly greedy, chasing the next buck as if it is the last buck, even when they have met every criterion of satiation.But Trump is different, because his brand of greed harks back to an idea of leadership that is primarily about adversarial dealmaking, rather than about innovation or improved managerial techniques. Trump’s entire career is built on deals, and his own narcissism is tied up with dealmaking. This is because of his early socialization into his father’s real-estate dealings in and around New York. Real estate in the United States, unlike the money-making modes of super-rich individuals in other countries, relies on deals based on personal reputation, speculation on future asset values, and the ability to launder spotty career records. Profits and losses over time can be hard to identify and quantify precisely, as Trump’s auditors and opponents have often confirmed, since profits, which depend on speculation and unknown future value, are by definition uncertain.Trump’s incessant boasts about being an apex dealmaker cast light on almost every aspect of his approach to his presidential decision-making. Numerous observers have long cast doubt on Trump’s image as a consummate dealmaker, pointing to his many failures in his long real-estate career, his abortive political and diplomatic deals, his backsliding and reversals, and his overblown claims about deals in progress. But these criticisms miss the point.Deals, whether in finance, real estate, or in any other part of the economy, are just one step in the process of reaching full-fledged, binding agreements subject to the force of law. They are a stage in the negotiation process that has no force until it is finalized as a contract. It is, at best, an agreement to agree, which can turn out to be premature, poorly conceived or unacceptable to one or other party. Put another way, it is an engagement, not a wedding. A deal allows a negotiator like Trump to claim victory and blame the other party or some other contextual variable if things do not work out.In fact, in the hands of someone like Trump, deals are ways to evade, postpone or subvert the efficient work of markets. Trump does not like markets, precisely because they are impersonal and invisible. Their results – for corporations, entrepreneurs, investors and shareholders – are subject to clear measures of success and failure.Because deals are personal, adversarial and incomplete, they are perfect grist for Trump’s relentless publicity machine, and allow him to polish his brand, massage his ego and signal his prowess to opponents – without the regulations and measurable consequences of regular market risks. The downside risk for an aborted or interrupted deal is negligible, and the upside is guaranteed by the legal power of fully completed contracts.Trump has figured out to an exceptional degree that dealmaking does not need to be successful in order to massively increase his wealth. Whether or not true, his claims to successful deals are the key to his brand and profitmaking worldwide, either directly or through the business endeavors of his sons. These range from his latest Trump perfume and Trump mobile telephone services, his Maga accessories, Trump golf courses around the world, his real estate and resorts, and of course his highly profitable cryptocurrency holdings. In every case, his deals either lead to further deals, which service his branding machine, or they lead to direct increases in his personal and corporate wealth. Deals, successful or not, are Trump’s magic means to amass money and feed his avarice.Avarice is a vice with a long history in Christian theology. It is widely defined as an excess of greed, an inordinate level of greed, an insatiable greed. It has been viewed by economic historians as a passion that must be curbed and replaced by calculated, moderated self-interest in order for the rationality of the modern market to function as a dominant economic principle. From this perspective, greed can have numerous objects – such as food, sex and power – whereas avarice is single-minded in its focus on money.Trump exemplifies this focus. Though he has to function in a world where avarice is meant to be regulated by the market mechanisms of price and competition, he has managed to successfully pursue his avarice with little obstacle.This driving desire defines Trump’s “egonomics” – the intimate connection between his narcissistic urges and his wish for increasing his stock of money. The governing principles of his economic policy have nothing to do with America getting its due, as his messaging about tariffs argues, or about restoring dignity to the working class, as he signals to his Maga base. Nor are they about power or prestige. The object of everything he does is money, and in the service of the boundlessness of money, which Trump has made the defining object of his desire. Other commodities are of interest to him only insofar as they serve his desire to acquire, hoard and increase his stock – of money.View image in fullscreenMoney for what?The first – and most soothing – theory is that Trump wants money to buy power – more of it, perhaps all of it. More power than China, than his generals, than Harvard. We all know power – via our parents, our teachers, our bosses, our police. It is a force we understand, a pull we recognize. If Trump only wants more of something that many people have, and even more want, he is legible, he is like us.But power for what? To do what? To get what?Perhaps he is chasing an unassailable place in history, both human and eternal. So then it is not just power he endlessly chases, but glory. For this we have some evidence in the clownish thesaurus of words that he uses to describe his achievements, his looks, his wit, his wisdom, his all-round superhumanity: best, most, only, incredible, ever, more. In this orgy of superlatives, he is always curled high up in the clouds, like a Maurice Sendak toddler. But since Trump, from his perspective, brooks no real competition in life, in politics, in real estate, or even in history, there can be no glory for him which is not tainted by the mediocrity of his competitors. And true glory usually requires some form of self-sacrifice, some sense of compassion, some ability to transcend oneself. Given his woeful deficits in these areas, the glory game cannot be the key to understanding Trump.And so we go to a more familiar space: the realm of prestige, status and stardom. This realm is wired into competitions, tournaments and casinos of every sort, where winning is well-defined, losing is for losers and there is usually only one survivor and one winner who takes all. The competition for status is as old as recorded human history and accompanies every human society that has had leaders and followers, more and less skilled competitors for food, shelter and sexual partners. It begins with simple rules for coming out on top and evolves over time into the most elaborate forms of status competition, often driven by males – including wartime exploits, trophy wives, palatial homes and bottomless conspicuous consumption.These tournaments of value can be observed in settings as disparate as auctions, horse races, philanthropic gifts and corporate mergers and acquisitions. There is widespread consensus among thinkers from many eras and regions that status is a limited good, which has its own economics of supply and demand, distinct from those of pecuniary gain. This insight looks, at first, like the key to Trump.But attractive as this argument may seem, it too is a red herring.View image in fullscreenTrump’s signature riffAmong Trump’s own tactics, the one he loves to use most is tariffs. Trump’s obstinate insistence on tariffs as the key to restoring American manufacturing, swelling the US treasury and reducing American consumer prices has flummoxed most mainstream economists. Tariffs are for Trump the ideal way to combine dealmaking, status-grabbing and his penchant for money as its own bottomless value.It is evident that Trump’s understanding of the trade-offs of globalization is rudimentary and often internally contradictory. Indeed, he shows signs of believing that making deals of any sort requires only outsize confidence, charismatic force and bottomless access to financial backing. In fact, Trump’s view of himself as an incomparable dealmaker (a claim at odds with his many entrepreneurial disasters) conceals his deep distaste of real markets – in which a large apparatus of binding promises, the tendency to stable price equilibria, and the connection of supply and demand through pricing – can frustrate his brand of deal-making, which is always oriented to maximizing his personal prestige.Trump’s deep-seated desire to be the winner who takes all in the global prestige economy sheds some light on his weaponization of tariffs. We can catch a glimpse of this logic in a most unlikely context. It was captured in detail by one of the fathers of British social anthropology, Bronisław Malinowski, in his 1922 book on a unique trading system that he found in the Trobriand Islands of Oceania, on several trips there in the years between 1915 and 1917. This anthropological classic, Argonauts of the Western Pacific, casts new light on Trump’s tariff mania.What Malinowski described is a system of trading across about 18 coral islands within a 175 sq mile (453 sq km) area, between “big men”, leaders of lineages who exchanged highly specific valuables (such as decorated shell necklaces and bracelets) and their counterparts in this network of islands. Called the kula system, it had a highly codified set of rules to hedge voyagers against oceanic weather dangers and hostile groups in other islands, some of whom were cannibals. The goods appropriate to kula exchange could never be hoarded, marketed or bartered like normal utilitarian goods. This was a strictly ceremonial system geared to enhancing the prestige of male elites, of moving these well-known objects in a circuit which could last for years.The diplomatic rituals of these exchanges were ensconced in an atmosphere of pretend hostility between the parties, often because other groups in these islands were real enemies, always poised for real warfare. Hanging on the knife-edge between trade and war, these exchange circuits were strictly distinguished from barter or money transactions (what we would today call market transactions). The kula system was a way of organizing exchange, averting war, signaling prestige and making allies through a tightly regulated flow of valuables outside market exchange circuits.Trump does not care about Malinowski, the Trobriand Islands, non-capitalist exchange systems or “big man” politics in kinship-based polities. But his operating system belongs in this type of diplomatic world, one that requires nothing except a non-negotiable interest in winning deals. Trump’s onslaught of tariffs, falling on everyone like nuclear ash, is meant to make him the king of the global prestige market, no matter the cost to diplomatic traditions, financial markets, customer capacities or fair balances of trade. Trump appears to be undistracted by any other economic priority outside the aim to be the apex dealmaker.The kula system is grounded in a non-monetary system of honor, prestige and reciprocity, which helps us understand Trump’s tariff strategy but does not fit his narcissist drive to crush all his fellow players. Even the kula system is about relationships. Trump is strictly about winning deals.So we must beware of seeing the urge to dominate all prestige markets as Trump’s bottom line. Trump’s bottom line is money. Being an avaricious man, Trump worships money – both its power and its pomp – and he seeks it through his extensive networks of children, clients, tax lawyers and cronies, all devoted to the increase of his wealth. This pecuniary drive has a transcendent, epic and unquenchable force which cannot be explained by reference to the other things that money can buy. Even his quest for prestige through arm-twisting tariff deals is primarily about positioning himself to secure future deals in his individual capacity. His is a special brand of avarice.View image in fullscreenThe new cryptocracyThere is no better way to explore the ways in which Trump’s various egonomic strategies come together than in the recent invention and propagation of cryptocurrency, which has spawned a shadow world of speculators, fraudsters, legal hucksters, elected and unelected lobbyists. Their usual victims are vulnerable citizens, low-level grifters, pensioners, badly informed investors and other natural prey. The entire industry lives in a gray economy, attached to mainstream markets, assets and regulators like the tiny remora fish that feast off sharks. It survives in a legal twilight zone, where its currency is accepted only by some businesses as legal tender, and where smart players use pump-and-dump tactics to make fast profits with short-lived “coins” of various kinds. Whatever the utility of cryptocurrency in the real world of goods and services, it is mainly a tool for amassing wealth by gambling on its future convertibility to real money in specialized currency exchanges.Cryptocurrency puts Trump in the position of being a player and the owner of a casino-like system at the same time, so that he always wins, if not in one role, then in the other. The outrageous self-enrichment schemes of Trump and his family in the crypto industry, which have been carefully exposed in several media outlets recently, establish new frontiers for Trump’s shameless violation of even the simplest norms about conflict of interest. The best example of these ventures is his memecoin, $Trump, which has made him and his close associates a fortune by selling access to Trump through a barely regulated crypto mechanism. By some estimates, Trump has gained several billions of dollars in his net worth through his crypto ventures, which combine nepotism, influence-peddling and dealmaking in a unique package.Through cryptocurrency, Trump has found the ultimate way to attach his core impulse – avarice – to the larger machinery of the markets. There is some truth to the argument that Trump wants more of everything he can get, including power, glory and prestige. But what he wants more than anything else is money, which is just a temporary token of more money, and more money for ever more.The unique instinct behind Trump’s avarice, which sets him apart from other billionaires who continue to chase wealth, is that he has found a way to build his fortune through deals – whether deals that make him money by inflating the value of his brand, which can then make him more money through more deals, or through the enforceability of completed contracts.Through his dealmaking, Trump has managed to triumph over the market, making it work for him to amass greater and greater sums of money, whether his deals are seen through to fruition or not. We can summarize Trump’s approach to markets by adapting a famous sentence, spoken by him, about how he grabs women: Trump grabs markets by the deal. Illustrations by Joao Fazenda
Arjun Appadurai, professor emeritus at New York University, is the former provost of the New School. More
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‘I have never seen such open corruption’: Trump’s crypto deals and loosening of rules shock observers
Cryptocurrency multibillionaire Justin Sun could barely contain his glee.Last month, Sun publicly flaunted a $100,000 Donald Trump-branded watch that he was awarded at a private dinner at Trump’s Virginia golf club. Sun had earned the recognition for buying $20m of the crypto memecoin $Trump, ranking him first among 220 purchasers of the token who received dinner invitations.Trump’s much-hyped 22 May dinner and a White House tour the next day for 25 leading memecoin buyers were devised to spur sales of $Trump and wound up raking in about $148m, much of it courtesy of anonymous and foreign buyers, for Trump and his partners.Memecoins are crypto tokens that are often based on online jokes but have no inherent value. They often prove risky investments as their prices can fluctuate wildly. The $Trump memecoin was launched days before Trump’s presidential inauguration, spurring a surge of buyers and yielding tens of millions of dollars for Trump and some partners.Trump’s private events on 22 May to reward the top purchasers of $Trump have sparked strong criticism of the president from ethics watchdogs, ex-prosecutors and scholars for exploiting his office for personal gain in unprecedented ways. But they fit in a broader pattern of how Trump has exploited the power and lure of his office to enrich himself and some top allies via cryptocurrencies.“Self-enrichment is exactly what the founders feared most in a leader – that’s why they put two separate prohibitions on self-benefit into the constitution,” said former federal prosecutor Paul Rosenzweig. “Trump’s profiting from his presidential memecoin is a textbook example of what the framers wanted to avoid.”Scholars, too, offer a harsh analysis of Trump’s crypto dealings.“I have never seen such open corruption in any modern government anywhere,” said Steven Levitsky, a professor of government at Harvard University and an expert on authoritarian regimes who co-authored the book How Democracies Die.Such ethical and legal qualms don’t seem to have fazed Trump or Sun. The pair forged their ties well before the dinner as Sun invested $75m in another Trump crypto enterprise, World Liberty Financial (WLF), that Trump and his two older sons launched last fall and in which they boast a 60% stake.The Chinese-born Sun’s political and financial fortunes, as well as those of other crypto tycoons, have improved markedly since Trump took office and moved fast to loosen regulations of cryptocurrency ventures at the Securities and Exchange Commission (SEC), the justice department and other agencies to upend Joe Biden’s policies.As the SEC has eased regulations and paused or ended 12 cases involving cryptocurrency fraud, three Sun crypto companies that were charged with fraud by an SEC lawsuit in 2023 had their cases paused in February by the agency, which cited the “public interest” and reportedly has held settlement talks.Trump’s and Sun’s mutually beneficial crypto dealings symbolize how the US president has boosted his paper wealth by an estimated billions of dollars since he returned to office, and worked diligently to slash regulations fulfilling his pledges to make the US the “crypto capital of the planet” and end the “war on crypto”.After the 22 May dinner, Sun posted: “Thank you @POTUS for your unwavering support of our industry!”Although Trump’s crypto ventures are less than a year old, the State Democracy Defenders Fund watchdog group has estimated that as of mid-March they are worth about $2.9bn.In late March, Reuters revealed that WLF had raised more than $500m in recent months and that the Trump family receives about 75% of crypto token sales.Trump’s pursuit of crypto riches and deregulation represents a big shift from his comments to Fox News in 2021, when he said that bitcoin, a very popular crypto currency, “seems like a scam”.View image in fullscreenIn July 2019, Trump posted that “Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade”, and noted that their value was “highly volatile and based on thin air”.Now, Trump’s new pro-crypto policies have benefited big campaign donors who lead crypto firms as well as Elon Musk, the world’s richest person, who spent almost $300m to help elect Trump, and who boasts sizable crypto investments in bitcoin through his electric car firm Tesla and his other ventures. Though Trump and Musk have since fallen out, the mogul’s crypto fortunes seem to have improved due to the president’s deregulatory agenda.Trump’s special envoy to the Middle East, Steve Witkoff, is a real estate billionaire who helped found WLF, in which he has a stake; Trump’s two oldest sons, Eric and Don Jr, and Witkoff’s son Zach have played key roles promoting WLF in the Middle East and other places.Trump’s use of his Oval Office perch to increase his wealth through his burgeoning crypto businesses while his administration rapidly eases regulations is unprecedented and smacks of corruption, say scholars, many congressional Democrats and some Republicans.“To me, Trump’s crypto dealings seem pretty explicit,” Julian Zelizer, a Princeton University professor who focuses on political history, told the Guardian. “Policy decisions are being made regarding parts of the financial industry that are being done not to benefit the nation, but his own financial interests … It’s hard to imagine what he’s doing benefits the nation.”Rosenzweig stressed that “not only do Trump’s extravagant crypto ventures benefit him personally as his administration slashes crypto regulations and takes pro-crypto steps at the SEC; they also benefit his tech bro backers who will take full advantage of the end of regulatory enforcement”.In Congress, leading Democrats, including Richard Blumenthal, a senator from Connecticut, and Jamie Raskin, a representative from Maryland, in May announced separate inquiries by key panels in which they are ranking members into Trump’s crypto dealings, and attacked Trump for using his office to enrich himself via his crypto operations.“With his pay-for-access dinner, Trump put presidential access and influence on the auction block,” Blumenthal told the Guardian. “The scope and scale of Trump’s corruption is staggering – I’ll continue to demand answers.”Last month, too, the Democratic senator Jeff Merkley, from Oregon, and the Senate minority leader, Chuck Schumer, introduced the “end crypto corruption” bill, which 22 other Democrats have endorsed.“Trump’s crypto schemes are the Mount Everest of corruption,” Merkley told the Guardian. “We must ban Trump-style crypto corruption so all elected federal officials – including the president, vice-president and members of Congress – cannot profit from shady crypto practices,” which his bill would curtail.Some former congressional Republicans are also incensed by Trump’s blatant use of his presidency to peddle $Trump. “Nobody should be allowed to use their public positions while in office to enrich themselves,” said ex-Republican congressman Charlie Dent of Pennsylvania, who once chaired the House ethics panel. “A member of Congress would not be permitted to engage in the kind of memecoin activities which the president has been doing.”Trump and his family have dismissed critics concerns about the 22 May events and his other crypto ventures.Before the 22 May dinner, Trump’s press secretary, Karoline Leavitt, told reporters that the president would attend his crypto gala in his “personal time” and it was not a White House event, but declined to release names of the many anonymous and foreign attendees.To allay criticism, the Trump Organization said in January that Trump’s business interests, including his assets and investments, would be placed in a trust his children would manage and that the president wouldn’t be involved in decision-making or daily operations. Trump’s family also hired a lawyer as an ethics adviser.But those commitments have been dwarfed by Trump’s public embrace of his crypto ventures and strong deregulatory agenda. In March, for instance, Trump hosted the first-ever “crypto summit” at the White House, which drew a couple dozen industry bigwigs who heard Trump promise to end Biden’s “war on crypto”.Trump’s crypto critics worry that the president’s strong push for less industry regulation may create big problems: the crypto industry has been battered by some major scandals including ones involving North Korean hackers and has been plagued by concerns about industry’s lack of transparency and risks.For instance, a report last December by leading research firm Chainalysis found that North Korean hackers had stolen $1.34bn of cryptocurrency in 2024, a record total and double what they stole the year before.The report concluded that US and foreign analysts believe the stolen funds were diverted in North Korea to “finance its weapons of mass destruction and ballistic missile programs”.Other crypto fraud schemes in the US have spurred loud alarms.In an annual report last September, the FBI revealed that fraud related to crypto businesses soared in 2023 with Americans suffering $5.6bn in losses, a 45% jump from the previous year.Sam Bankman-Fried, who founded the now bankrupt FTX crypto exchange, was sentenced to 25 years in prison in March 2024 by a New York judge for bilking customers out of $8bn.Nonetheless, a justice department memo in April announced it was closing a national cryptocurrency enforcement team that was established in 2022, which had brought major crypto cases against North Korean hackers and other crypto criminals.The memo stressed that the justice department was not a “digital assets regulator” and tried to tar the Biden administration for a “reckless strategy of regulation by prosecution”. The memo stated that a pro-crypto Trump executive order in January spurred the justice department’s policy shift.Ex-prosecutors and ethics watchdogs worry increasingly that crypto scandals and conflicts of interest will worsen as the Trump administration moves fast to ease crypto oversight at the justice department, the SEC and other agencies.Some of WLF’s high-profile crypto deals have involved overseas crypto firms which have had recent regulatory and legal problems in the US, fueling new concerns, watchdogs and ex-prosecutors say.View image in fullscreenOne lucrative deal raised eyebrows when WLF was tapped to play a central role in a $2bn investment by Abu Dhabi financial fund MGX that is backed by the United Arab Emirates in the world’s largest crypto exchange, Binance.As part of the deal, the Abu Dhabi fund bought $2bn of a WLF stablecoin, dubbed USD1, to invest in Binance. Stablecoins are a popular type of cryptocurrency that are often pegged to the dollar.The WLF deal comes after Binance in 2023 pleaded guilty to violating US money-laundering laws and other violations and the justice department fined it a whopping $4bn.Furthermore, Binance’s ex-CEO and founder, Changpeng Zhao, pleaded guilty in the US to violating the Bank Secrecy Act and failing to maintain an effective anti-money-laundering program.Zhao, who still owns 90% of Binance, served a four-month jail term last year.WLF’s $2bn deal was announced at an Abu Dhabi crypto conference on 1 May that drew Eric Trump two weeks before Trump’s visit to the UAE capital, sparking concerns of foreign influence and ethics issues.Increasing WLF’s ties further with Binance, the crypto exchange announced on 22 May that it had begun listing the stablecoin for trading purposes. Binance got some good news at the end of May, too, when the SEC announced the dismissal of a civil lawsuit it filed in 2023 against the exchange for misleading investors about surveillance controls and trading irregularities.Paul Pelletier, a former acting chief of the justice department’s fraud section, noted that SEC moves back in February “to emasculate its crypto enforcement efforts sent crypto fraudsters a welcome mat of impunity”.He added: “The recent dismissal of the SEC’s lawsuit against Binance for mishandling customer funds, days after it began listing the Trump family’s cryptocurrency on its exchange, seemed to be the natural consequence of such enforcement laxity. Victims be damned.”Other agency deregulatory moves that favor crypto interests can boost Trump’s own enterprises and his allies, but pose potential risks for ordinary investors, say legal scholars.Columbia law professor Richard Briffault noted that as part of the Trump administration’s wide-ranging and risky crypto deregulatory agenda which can benefit Trump’s own crypto ventures, the Department of Labor in late May nixed a Biden-era “extreme care” warning about 401K plans investing in crypto.“[The labor department] has rescinded the red light from the Biden years for 401K retirement plans, which is another sign of the Trump administration’s embrace of crypto,” Briffault said.Briffault, an expert on government ethics, has told the Guardian more broadly that Trump’s crypto ventures and his 22 May memecoin bash are “unprecedented”.“I don’t think there’s been anything like this in American history,” he said. “Trump is marketing access to himself as a way to profit his memecoin. People are paying to meet Trump and he’s the regulator-in-chief. It’s doubly corrupt.”In late May, in a new crypto business twist, the Trump Media and Technology Group, the parent of Truth Social, said it had sealed a deal to raise $2.5bn to be used to buy bitcoin, creating a reserve of the cryptocurrency.Meanwhile, Trump’s stablecoin fortunes and those of many industry allies could get boosts soon from a Senate stablecoin bill, dubbed the “genius act”, that’s poised to pass the Senate on Tuesday but which critics have said loosens regulatory controls in dangerous ways unless amended with consumer protections and other safeguards.Senators Merkley and Elizabeth Warren, of Massachusetts, led unsuccessful efforts to amend the bill to thwart potential criminal abuses, protect consumers and prevent Trump from using his office to profit his crypto businesses.“The ‘genius act’ fails to prevent sanctions evasion and other illicit activity and lets big tech giants like Elon Musk’s X issue their own private money – all without the guardrails needed to keep Americans safe from scams, junk fees or another financial crash,” Warren told the Guardian.“Donald Trump has turned the presidency into a crypto cash machine,” Warren said. The Genius act, Warren stressed, should have “prohibited the President AND his family from profiting from any stablecoin project.”More broadly, Kedric Payne, the general counsel and ethics director at the Campaign Legal Center, said: “President Trump’s financial stakes in the crypto industry at the same time that he is determining how the government will regulate the industry is unprecedented in modern history. This is precisely the type of conflict of interest that ethics laws and norms are designed to stop.” More
- in US Politics
‘This is the looting of America’: Trump and Co’s extraordinary conflicts of interest in his second term
The South Lawn of the White House had never seen anything like it. The president of the United States was posing for the world’s media against a backdrop of five different models of Tesla, peddling the electric vehicles with the alacrity of a salesman on commission.“I love the product, it’s beautiful,” Donald Trump said as he sank into the driver’s seat of a scarlet Model Y. With the Tesla CEO, Elon Musk, beside him, he went on to enlighten the American people that some Tesla models retail for as little as $299 a month, “which is pretty low”.That same day, within hours of the White House’s makeover into a Tesla showroom, the New York Times revealed that Musk had decided to invest $100m in political groups working for Trump. The massive injection of capital would enhance the nearly $300m Musk had already spent getting Trump elected.A week after the commercial on the South Lawn, on 19 March, Trump’s commerce secretary, the billionaire investment banker Howard Lutnick, went on Fox News and exhorted viewers to “buy Tesla”. “Who wouldn’t invest in Elon Musk’s stock?” he gushed. “He is probably the best person to bet on I’ve ever met.”At the time Lutnick made those remarks, he had yet to divest himself from Cantor Fitzgerald, the financial services firm he had led for 35 years. He was talking up stock in which he still had a vested interest – Cantor held $300m in Tesla shares, a stake that has since soared to $555m. And the commerce secretary was also bigging up his friend Musk, whose SpaceX and Starlink businesses are regulated by the commerce department that Lutnick now controlled.Eight days in March, three friendly billionaires, one of them the world’s most powerful person, another the world’s richest person. Doing what friends do: scratching each other’s backs. Even though Musk later fell out with Trump – in a shocking social media spat that roiled US politics – the imagery remains powerful and highly symbolic of Trump’s second term in the White House.View image in fullscreenBetween them they committed in those eight days acts that, had they occurred during any previous presidency – including Trump’s own first administration – would have provoked howls of protest concerning quid pro quo. Yet those eight days represent just a tiny slice of the graft and possible misconduct that is unfolding.The gift by the Qatari government of a $400m luxury jetliner to be repurposed as Air Force One has become the paradigm of the blitz of ethical dilemmas unleashed by Trump. The Pentagon last month accepted possession of the plane, which will be transferred to Trump’s presidential library once he leaves office.That Trump doggedly accepted the Qatari “palace in the sky” despite widespread condemnation speaks volumes about how indomitable he feels at this moment. He has shrugged aside the rebukes even of devoted Trump supporters, including the rightwing commentator Ben Shapiro, who bridled at the transfer’s grubby appearance, calling it “skeezy stuff”.It also shows Trump’s disdain for the US constitution, given the emoluments clause’s clear prohibition. Presidents are not allowed to accept high-value gifts from foreign governments without congressional consent.Yet the luxury jumbo jet is also just the thinnest edge of a very fat wedge. There has been so much more that has flown, if not under the radar, then partially obscured from sight amid the ethical blizzard of corruption and influence.There have been multimillion-dollar TV packages, real estate deals in Arab petrostates, dinners with the president going for $5m a pop, plum job offers for contributors to Trump’s inaugural fund, cryptocurrency ventures attracting lucre from secret foreign investors, “drill, baby, drill” enticements for oil and energy donations – the list goes on, and on … and on.View image in fullscreenTrump and his team of billionaires have led the US on a dizzying journey into the moral twilight that has left public sector watchdogs struggling to keep up. Which is precisely the intention, said Kathleen Clark, a government ethics lawyer and law professor at Washington University in Saint Louis.“They have mastered the technique of flooding the zone – doing so much so fast that they are overwhelming the ability of ethics groups and institutions to respond.”Chris Murphy, the Democratic US senator from Connecticut, has delivered two long speeches on the floor of his chamber in which he has itemised Trump and Co’s most controversial transactions. The record already stretches to scores of entries, chronicling what Murphy calls Trump’s “efforts to steal from the American people to enrich himself and his friends”.In an interview with the Guardian, the senator said that Trump’s was a “pay-for-play administration. That’s the underlying theme. You pay Donald Trump money, he does favors for you. That’s old-fashioned corruption.”Clark’s analysis is even more pointed. “People talk about ‘guardrails’ and ‘norms’ and ‘conflict of interest’, which is all very relevant,” she said. “But this is theft and destruction. This is the looting of America.”Trump signaled that he would be a president like no other at the start of his first term, when he became the only occupant of the Oval Office in modern times to refuse to divest his assets by putting them into a blind trust. Though presidents are not bound by conflict of interest laws applying to other elected officials, the norm has been for incumbents to set themselves high standards, the archetype being Jimmy Carter’s sale of his peanut farm.Trump, by contrast, put his assets in a trust that remained under the control of his family, with him as its sole beneficiary. He incurred numerous accusations of first-term conflicts of interest, as foreign officials from 20 countries descended on his hotels, while Secret Service agents in Trump’s security detail were made to pay premium rates, pouring at least $10m into his bank account.Such unprecedented disregard for time-honored ethical boundaries was shocking at the time. Now it looks merely quaint.“In the first Trump administration there were ethical lapses,” said Danielle Caputo, senior legal counsel for ethics at the Campaign Legal Center watchdog organization. “With this new administration, there’s not just a disregard for ethics rules, there’s contempt.”The conversion of political power into cash began even before Trump re-entered the White House. Weeks before the inauguration, Melania Trump sealed a $40m deal with Jeff Bezos for an Amazon Prime “behind-the-scenes” documentary on her life.Trump banked millions of dollars of his own by leveraging his status as president-elect to browbeat tech companies. He settled disputes over the freezing of his then Twitter and Facebook accounts in the wake of the 6 January 2021 insurrection at the US Capitol, prising $10m out of his friend Musk, and $25m from Meta.View image in fullscreenTrump used the months leading up to November’s election to test-run what, as Murphy noted, has become a theme of his second presidency – pay-to-play. He invited oil executives to Mar-a-Lago and, as the Washington Post revealed, offered them a “deal” in which they would donate $1bn to his campaign and in return he would tear up profit-limiting environmental regulations once he was back in the White House.He kept his promise: on day one of his new administration he discharged a barrage of pro-fossil fuel actions.Donors to his record-breaking $239m inaugural fund have also found Trump to be a grateful benefactor. Warren Stephens, an investment banker who gave $4m, was rewarded with the role of US ambassador to the UK; Jared Issacman, a billionaire pilot and close associate of Musk’s, gave $2m to the fund and was tapped to lead Nasa (he was abruptly yanked from the appointment last month after he was reportedly discovered to have been been donating to Democrats).The pattern has continued into 1600 Pennsylvania Avenue. Three months into the administration, Trump’s eldest son, Don Jr, launched an elite private members’ club named Executive Branch which commands a sign-in fee of a cool $500,000.Its attraction? Access to cabinet members and top Trump advisers.Not to be outdone by his own son, Trump himself has followed the same playbook at his Mar-a-Lago resort. In March, he began inviting business leaders to dine with him in group settings at $1m a seat.Prefer something more intimate? No problem. One-on-one meetings are also available, yours for $5m.For a seasoned observer such as Norman Eisen of the Brookings Institution, the sheer mass of problematic transactions puts the administration beyond the pale. “It’s over the line, unlawful, corrupt and unethical. It is un-American.”Eisen has experience dealing with knotty ethical issues. He was special counsel for ethics during Barack Obama’s first year in the White House.Obama notes in his autobiography, A Promised Land, that Eisen earned himself the title of Dr No, so strict was his approach to conflicts of interest. He would tell White House officials hoping to attend outside events that “if it sounds fun, you can’t go”.View image in fullscreenEisen told the Guardian that he prevented Obama from refinancing his family home in Chicago. “He was regulating the banking industry at the time, in the midst of the Great Recession.”The contrast between such almost pedantic strictures and the free-for-all in today’s White House astonishes and dismays Eisen. “If my somewhat tongue in cheek motto for Obama was ‘If it’s fun, you can’t do it,’ then the motto of the Trump White House seems to be ‘If you can make a buck, grab it.’”Exhibit one of such conduct, Eisen suggests, is the Trump family’s dive into the world of crypto. Shortly before the inauguration, they launched personal lines of meme coins, $Trump and $Melania.Then they issued a new cryptocurrency pegged to the dollar, known as a stablecoin. Taken together, Eisen believes that the two crypto ventures from the family of a sitting president amount to “one of the worst and most shocking conflicts of interest in our nation’s history”.Trump bragged on the campaign trail that he would turn the US into the “crypto capital of the planet”. He was more circumspect in front of his faithful followers about the big plans his sons were simultaneously developing to cash in on the currency.Since his election victory, Trump has used his presidential status and executive power to boost not only the general standing of crypto but also his personal stake within it. One of his early executive orders created a “strategic bitcoin reserve” designed to bolster the industry.At the same time, he eviscerated basic regulatory controls, halted federal crypto-related lawsuits and disbanded a taskforce trained to hunt down crypto criminals. “We have a president whose net worth now includes very substantial investments in cryptocurrency who at the same time is loosening regulations on the crypto industry,” Eisen said.The unrivalled magnetism of the US presidency helped Trump to blast his nascent meme coin, a currency almost entirely reliant on hype, into the stratosphere. It rocketed from $6.50 on inauguration day to a peak of $73.Then, when it predictably plummeted back down to below $10, he used his presidential allure brazenly once again to boost the coin. This time he announced a “private intimate dinner” for the top 220 $Trump investors, followed by an exclusive White House tour for the top 25.The ensuing scramble for a seat at the presidential dining table reportedly earned the Trump family $148m.The $Trump meme coin is an ethics regulator’s waking nightmare. There is little transparency around who is channelling money into it, and even less around the potentially nefarious motives of investors.The same might be said about the Trumps’ other big crypto venture, World Liberty Financial, which was launched last September by Trump’s sons. The president himself is listed by the company as its “chief crypto advocate”.skip past newsletter promotionafter newsletter promotionFederal law sets tight rules against foreign parties donating to presidential campaign or inaugural funds. Yet there is nothing to prevent outside interests with connections to foreign governments engaging with World Liberty and its new product, the USD1 stablecoin.One of its biggest backers is the Chinese-born crypto billionaire Justin Sun (best known for paying $6.2m at a New York art sale for a banana taped to a wall, then eating it). Before the inauguration, Sun pumped $75m into World Liberty. A few weeks later, the Securities and Exchange Commission paused an investigation into him for alleged securities fraud.View image in fullscreenUSD1 is currently valued at $2.3bn, the lion’s share of which comes from a $2bn transaction by MGX, a firm which happens to be chaired by the intelligence chief of the United Arab Emirates. That a company with ties to the government of an Arab petrostate should be able to make such a giant investment in a crypto venture generating profit for the sitting US president and his family goes against the grain of decades of robust accountability work countering conflicts of interest.“We’ve been pretty successful in this country rooting out corruption, or at least pushing it into the shadows,” Murphy, the US senator, told the Guardian. “Now it happens out in the open.”And it doesn’t stop there. Over the past few months Trump’s second son, Eric, has been frenetically traveling the globe in search of real estate deals, throwing to the winds the pledge Trump made in his first administration to eschew any foreign business transactions.In his second administration, Trump has made no such promise. All he has conceded this time, in a document released by his lawyers in January, is that the Trump Organization will avoid cutting business deals with foreign governments.Even that boundary has been pushed close to breaking point. Eric Trump sealed his first deal since Trump re-entered the White House in April.It involves the construction of the Trump International Golf Club & Villas outside the Qatari capital, Doha, as part of a $5bn luxury beachside resort. The company managing the development, Qatari Diar, is owned by the sovereign wealth fund of the Qatari government.Two weeks after the Trump Organization announced the deal, the president himself arrived in Doha as part of his three-country tour of the Middle East. He declared the trip a huge success, having drummed up trillions of dollars of business and investments for the US.The Guardian invited the White House to comment on complaints that the president has blurred his public duties with his family’s personal profit-making activities to a degree never before seen in the US. A White House spokesperson replied with a statement which they asked us to print in its entirety, so here goes:“There are no conflicts of interest. President Trump’s assets are in a trust managed by his children. It is shameful that the Guardian is ignoring the GOOD deals President Trump has secured for the American people, not for himself, to push a false narrative. President Trump only acts in the best interests of the American public – which is why they overwhelmingly re-elected him to this office, despite years of lies and false accusations against him and his businesses from the fake news media.”The argument that there is no conflict of interest because Trump’s business is handled by his children, specifically his sons – Don Jr leading on crypto and his social media empire, Eric on real estate – is an interesting one. Sons seem to be de rigueur, to the extent that members of Trump’s inner circle who lack them might feel the need to borrow one.View image in fullscreenTake other key figures in Trump’s cabinet, which is packed with so many banking and energy billionaires that it ranks as the richest presidential cabinet in modern history. Lutnick, the commerce secretary, who has a personal fortune of about $2.2bn, has been involved in various accusations of conflict of interest since he encouraged Fox News viewers to “buy Tesla”.At the start of this year Cantor Fitzgerald, the Wall Street firm Lutnick led for almost four decades, increased its investment in Strategy, the biggest corporate holder of bitcoin in the world. Cantor’s stake rose by several hundred million dollars to $1.3bn, research by the watchdog Accountable.US has found.At the same time, Lutnick was actively helping Trump create his strategic bitcoin reserve, a move that greatly strengthened the cryptocurrency.Last month, Lutnick divested himself of his Cantor stake, but he did so by transferring his ownership to his two sons. Cantor is now controlled by Brandon Lutnick, 27, and Kyle Lutnick, 28.Or take Robert F Kennedy Jr, the vaccine-skeptic health secretary. Under intense pressure from Democratic senators, he agreed to divest his 10% stake in any payout from an ongoing lawsuit in which he is engaged against Merck over its HPV vaccine, Gardasil.Government officials are not allowed under federal law to participate personally in official matters in which they have a financial interest. So what did Kennedy do? He transferred his stake in the case to one of his adult sons.And then there’s Mehmet Oz, the multimillionaire physician better known by his TV name, Dr Oz, whom Trump put in charge of Medicare and Medicaid. As the Washington Post has reported, Oz co-founded a health benefits company, ZorroRX, that helps hospitals save on prescription drugs.This would have been an indisputable conflict of interest, because in his job as head of the Centers for Medicare and Medicaid Services, Oz wields huge sway over hospital drug policies, and thus ZorroRX profits. Since taking up the position Oz, whose wealth is put at up to $300m, has divested himself of some of his investment portfolio and is no longer mentioned on ZorroRX’s website.View image in fullscreenHis fellow co-founder of ZorroRX, however, is still listed as the firm’s head of medical affairs. That’s his son, Oliver Oz.Under federal conflict of interest law, there is no prohibition on adult children managing the interests of parents who hold public office. Yet the spirit of the law does force us to reflect on why so many Trump administration leaders are so fond of handing sensitive money-making portfolios to their sons.“By giving over to your son, you are immediately raising questions about how separate you are going to be from the success of this business,” said Caputo of the Campaign Legal Center. “Will you be focused on what’s best for the public, or will you be guided in your decision-making by what would most benefit your family?”In the last analysis, what matters most perhaps about the financial dealings of the Trump administration is what impact they are having on the American people. In particular, what is it doing to the 77 million voters who put their trust in Trump and sent him back to the Oval Office?Trump returned to the White House partly on his promise to working-class Americans that he would “drain the swamp”, liberating Washington from the bloodsucking of special interests. Yet a review by the Campaign Legal Center found that Trump nominated at least 21 former lobbyists to top positions in his new administration, many of whom are now regulating the very industries on whose behalf they recently advocated.Eight of them, the Campaign Legal Center concluded, would have been banned or restricted in their roles under all previous modern presidencies, including Trump’s own first administration.They include Pam Bondi, the US attorney general. She approved the gift of the Qatari luxury jetliner as “legally permissible”, having herself worked as a lobbyist for Qatar.Trump’s other great pledge was that he would put the wellbeing of “forgotten” working people before that of the vested elites. His appeal was pitched at the millions of rural and working-class Americans who have languished from mounting income inequality, the decline of manufacturing jobs in the globalised economy, and what he claimed was the negative effects of millions of undocumented immigrants.Evan Feinman has witnessed personally and up close how this promise has fared in Trump 2.0. For the past three years, Feinman was busy leading a $42.5bn program created by Congress to bring affordable high-speed internet to every American home and business that needed it.The project was vast and ambitious, on a par with the rural electrification drive that transformed the heartlands of America in the 1930s. Located within the US commerce department, its success is critical to the future prosperity of millions of Americans, especially those in hard-bitten rural areas of the sort that solidly backed Trump in the last election.Studies have shown that giving families access to the internet improves the grades of school students, increases college enrolment and reduces the likelihood of households falling into debt. It also helps older Americans stay in their own homes and avoid residential care.By the inauguration, the broadband project was well under way, with several states only weeks away from breaking ground and laying the cables. Then Lutnick took over the reins of the commerce department.Within a days of his confirmation, Lutnick met with senior managers and informed them he wanted to scale back on the use of fibre optic and switch to satellite. According to an account of the meeting that was given to Feinman by someone present, Lutnick specifically inquired after his friend Musk, the CEO of Starlink, which provides internet services through low-Earth orbit satellites.View image in fullscreenDays after that, Feinman was told he was being let go. His contract was up for renewal, and it wasn’t being extended.“I was dismayed,” Feinman told the Guardian, insisting that his distress was not so much related to his own dismissal but out of concern for the Americans who would be harmed by the shift. By his reckoning, satellite internet would not only be slower than broadband, it would also be much more expensive – costing users an extra $840 a year in fees.“For Americans in rural locations, that’s going to really hurt. Many of the president’s strongest supporters – up to hundreds of thousands of families who voted for Trump – are going to see slower, more expensive internet services, and all to the benefit of the wealthiest man on earth.”According to some estimates, Musk’s Starlink stands to make $10bn to $20bn should the shift from broadband to satellite internet go ahead.The episode has left Feinman “deeply saddened. I see my nation harming itself in ways that are inexplicable and entirely avoidable.”He fears for rural Americans who will pay the price. “These are communities who put their trust in this administration. They are going to find that their trust has not been honored, and it will be to their significant future detriment.” More
- in US Politics
Trump’s crypto ventures may be his most dangerous moneymaking scheme | Mohamad Bazzi
Throughout his business career, Donald Trump sought new ways to leverage his name to make easy money. He ran an airline, a university and a winery. Thanks to the Apprentice show that made him a reality TV star, the US president slapped his name on real estate projects around the world built by other companies – along with Trump-branded steaks, vodka, deodorant and bottled water. Many of these businesses ultimately failed, but Trump rarely invested his own funds and he still walked away with hefty licensing fees.Today, as the most powerful person in the world, Trump has found perhaps the easiest way to profit off his name: cryptocurrency. Days before his inauguration for a second term on 20 January, Trump’s family business launched a meme coin, called $Trump, which is a type of digital currency often connected to an online joke or mascot. It has no inherent value beyond speculation. The coin quickly soared in value up to $75 per token, but it crashed days later. No matter the ultimate price, Trump and his family rake in millions of dollars in fees as the coin is traded by speculators hoping to turn a quick profit, or those trying to curry favor with him.It’s difficult to keep up with all the ways that Trump is corrupting the US presidency and using it for personal profit, but his crypto ventures are among the most dangerous because they potentially allow him and his family to collect hundreds of millions of dollars from foreign investors and governments that would normally have a harder time funneling money to a US politician. Thanks to the memecoin and other deals, the Trump family’s wealth increased by nearly $3bn in the last six months. Trump has proven himself the most successful president – at monetizing the presidency.While he is exempt from conflict of interest laws that ban federal employees from profiting off their positions, every US president since the 1970s had voluntarily abided by these rules – until Trump. Previous occupants of the White House either sold their financial holdings or set them aside in blind trusts. But in his first term, Trump refused to divest from his business empire, which is mostly centered around the Trump Organization and is still managed by his sons.Since Trump’s first term, his family business has also evolved beyond a real estate conglomerate that licenses the Trump name to hotels, luxury towers and golf courses around the world, earning millions of dollars in branding and management fees without investing its own funds in most projects. The business now includes a portfolio of social media and crypto ventures, providing Trump with new ways to profit from being in office. And Trump is more emboldened to ignore norms set by past presidents, thanks to a compliant Congress led by Republicans and a US supreme court ruling last year which gave Trump “absolute immunity” from prosecution for his official acts as president.Trump’s foray into cryptocurrency underscores the ways he can leverage the presidency for personal gain by exploiting his sense of impunity and an industry that is notorious for fraud and a lack of transparency. After the value of his memecoin collapsed, Trump’s crypto venture announced in April that the 220 largest buyers of the token would be invited to a private gala dinner with the president at his Virginia golf club, while the top 25 buyers would get access to a VIP reception with Trump and a White House tour. Once that contest was under way, the $Trump coin got a new round of media attention and its value jumped by more than 50%. The more people bought the token, the more Trump and his family profited from crypto transactions that are usually shrouded in anonymity. Since the memecoin’s launch in January, Trump-affiliated businesses received $312m from crypto sales and $43m in other fees, according to a Washington Post analysis of trading data.Of course, US presidents for decades have used private dinners and gatherings to grant special access to wealthy donors and raise funds for their political parties or their own campaigns. But campaign contributions carry legal restrictions on how they can be spent, and US donors can’t remain anonymous and must disclose all of their donations to political candidates. The sweepstakes dinner organized by Trump’s crypto business was not a fundraiser or campaign event – it was a gathering arranged to directly enrich him and his family.Beyond the inherent conflict of Trump doing business within an industry that he has immense power to regulate as president, Trump also opened himself up to foreign influence as his memecoins became a vehicle for foreign actors to funnel money to his family. While Trump’s crypto business has refused to release a list of those invited to last month’s dinner at the Trump National Golf Club in Virginia, media organizations compiled lists of attenders that included foreign citizens who would normally be forbidden from donating funds to US politicians. (The Washington Post found that nearly half of the top 220 Trump memecoin holders purchased their coins from crypto exchanges that reject US-based customers, meaning they are probably foreign buyers. And 19 of the top 25 buyers, who were invited to a VIP reception with Trump before the dinner on 22 May, and a “special tour” the next day, had bought coins from similar exchanges.)The best-known foreign investor who attended Trump’s dinner was Justin Sun, a Chinese billionaire who founded the crypto platform Tron and had spent more than $20m on the president’s memecoins, earning him the distinction of being the contest’s top buyer. In 2023, the Securities and Exchange Commission, under Joe Biden’s administration, charged Sun with fraud and market manipulation. But a few weeks after Trump took office, the SEC asked a federal court to pause its lawsuit.What could be behind the SEC’s change of heart about pursuing charges against Sun under the second Trump administration? Sun is one of the top investors in World Liberty Financial, a crypto venture launched by Trump’s family in September. After Trump won the November election, Sun bought $75m in World Liberty tokens, and he was named an adviser to the company.World Liberty is at the heart of another foreign entanglement – and potential conflict of interest – for Trump and the crypto industry. On 1 May, the president’s son Eric and a business partner, Zach Witkoff (who is also the son of Steve Witkoff, Trump’s special envoy), announced that an investment fund backed by the government of Abu Dhabi would invest $2bn using a stablecoin – a form of digital currency – offered by World Liberty. That transaction could eventually generate hundreds of millions of dollars in revenue for the president and his family.Years before he got into the business, Trump had dismissed cryptocurrencies as “a scam” which have values that are “based on thin air”. But Trump changed his tune dramatically when he met with the highest-paying customers of his personal memecoin at last month’s dinner. “The past administration made your lives miserable,” Trump told his guests, referring to a Biden administration crackdown on crypto companies. And then the president promised to do things differently: “There is a lot of sense in crypto. A lot of common sense in crypto.”Already, the Trump administration has been pushing to deregulate the industry and in April instructed the justice department to disband a unit that focused on investigating crypto-related fraud. Last year, a federal judge sentenced Sam Bankman-Fried, who founded the now bankrupt FTX crypto exchange, to 25 years in prison for perpetuating one of the largest financial frauds in modern history, and bilking his customers out of billions of dollars.Once Trump dismantles regulation and law enforcement of the industry, he has promised to make the US the “crypto capital of the planet”. And the president will continue to enrich himself and his family along the way.
Mohamad Bazzi is director of the Hagop Kevorkian Center for Near Eastern Studies, and a journalism professor, at New York University More
- in US Politics
Is every memecoin just a scam? Experts on whether Andrew Tate and Trump are fleecing their followers
In November last year, I was turned into a memecoin. Several, in fact.Someone alerted me that a memecoin called Dork Nerd Geek ($DNG) had been minted with a picture of my face, and it already had a market cap (the total value of all coins in circulation) of $29,000. Twenty minutes later it was $100,000. An hour later it was $800,000.I had no idea what was going on, but I did know that “Dork Nerd Geek” was the nickname Andrew Tate gave me because I’ve spent much of my journalistic career investigating allegations of human trafficking made against him.I noticed he was currently livestreaming to his followers. I opened up his live stream and, for the first time, bore witness to the insane volatility of the memecoin market.In the space of 10 minutes, dozens of new me-related memecoins were being minted, including “Disgraced News Gatherer”, “Matt Shea is a faggot,” and “Take My Wife Tate (CUCK),” the latter of which included a picture of my fiancee taken from Instagram. Tate was pumping some of these memecoins in value merely by talking about them, with market fluctuations happening in real time on the order of millions, based on his every word.Two seconds after he said the words “Fuck Matt Shea,” a coin called “FUCK MATT SHAE [sic]” soared in value. Twenty minutes later, he uttered the words “Fuck Matt Shea … ” again and it went even higher, only to drop back down to nothing when he finished his sentence with “… is not a generational asset”. He then said he would pump the coin after taking a piss. He walked offscreen to urinate. It rocketed.View image in fullscreenSoon, there were hundreds more Matt Shea memecoins with similar names, as his followers tried to trick people into thinking that their Matt Shea memecoin was the one Tate was pumping. His words became memecoins, those memecoins shot up in value, and then the value disappeared instantaneously.All in all, about $2m was spent by people on memecoins making fun of me in the span of a few hours, and hundreds of millions more on other coins he mentioned during the stream.By the end of his live stream, the value of all the coins he pumped was back to near zero. All the fans who had invested at his behest collectively would have lost hundreds of millions of dollars.His followers may have felt they were in on the joke, but in the end they mostly lost their money. Only a tiny number of wallets actually profited from the coin including one crypto that made a profit of $240,000.A number of online crypto investigators including Coffeezilla, bored2boar, StarPlatinum and others have found that Tate has manipulated memecoin markets using “pump and dump”-like schemes, leading to large profits for those within his inner circle. We put the allegations in these investigations to Tate’s team, who said they had no comment.What happened on Tate’s stream that day felt bizarre but I didn’t completely understand what I was witnessing. I thought I basically understood bitcoin, but how do memecoins differ, and why do they continue to be popular when so many people have lost money on them?Is every memecoin a scam?According to David Gerard, author of Attack of the 50 Foot Blockchain: “Basically, literally, yes.”“All of this is like a big game of pretend with made-up financial instruments,” he said. “It’s printing your own made-up money. You print your own Monopoly money and then people buy it from you for real money.”The best thing you could possibly say about memecoins is that they initially felt like a funny, countercultural way to participate in internet culture. They satirised a financial system that increasingly looked like a silly game to those on the outside. They encapsulated a humorous generational nihilism.According to Sander Lutz, the nation’s first crypto-focused White House correspondent: “You could consider a memecoin to be a stock in a cultural phenomenon – like Dogecoin and the Doge meme.”“Another way of defining a memecoin,” Lutz said, “is a cryptocurrency token that has an acknowledged inherent lack of value. The crypto world, outside of memecoins, is full of so many people who are trying to pitch you on tokens that are ‘actually really profound’ or ‘represent a stake’ in some kind of ‘useful network’, but are equally worthless. What makes memecoins different is that there’s none of that noise.”In other words, all crypto is bullshit, but memecoins are consciously bullshit.In their essence, memecoins distill the attention economy into a tradable asset, monetising the ebb and flow of viral internet hype. This has created a system in which the biggest attention-seekers on the planet – Logan Paul, Andrew Tate, Elon Musk, Donald Trump – can bleed their followers for profit. The more controversial they are, the more viral they are; and the more viral they are, the more their memecoins increase in value. Last year, some developers performed attention-seeking stunts on livestreams to pump their tokens, leading to animal abuse and a faked suicide.Chase Herro, the co-founder of Trump’s main crypto venture, World Liberty Financial, said about crypto: “You can literally sell shit in a can, wrapped in piss, covered in human skin, for a billion dollars if the story’s right, because people will buy it.”Most memecoins end up making money for the person who makes them as a “rug pull” or a “pump and dump”. The term “rug pull” was actually invented by the crypto community, and it works like this:First, you mint a memecoin, and make sure that you and your mates own most of the liquidity pool (the total number of coins in circulation). The size of the liquidity pool – the amount of that memecoin that “exists” – is, like everything else in memecoins, a totally made-up number.Second, you generate hype around the coin by convincing people it will “moon” (shoot up in value). This usually involves getting a celebrity, influencer or the president of the US, to promote it. People then buy the coin, thinking it will be a good investment. Law of demand means that as people buy it, the “value” of the coin goes up, and since you and your mates own the lion’s share, you get richer.Then, at a time known only to you, the creator of the coin, and other insiders, you “pull the rug”, selling off all your stock at the newly high price. You make money, and the value of the coins bought by the masses you manipulated shoots back down to zero. It’s basically a way to just trick people into giving you money, dressed up as an “investment”.A “pump and dump” is pretty much the same thing, but with the slight caveat that you’re doing it with a coin that already exists, rather than creating your own. You buy a cheap coin, “pump” its value by hyping it so others invest, then “dump” all your stock, selling it off at a huge profit and causing everyone else to lose their money.“It’s provably negative sum,” Gerard told me. “The only way you get money is by other people losing money.”The only people really getting rich off memecoins are influencers and their crypto enablers (people like Herro, or Hayden Davis, the guy who helped launch Argentinian president Javier Milei’s memecoin and was involved in Melania Trump’s memecoin).View image in fullscreenDespite this, the idea that trading memecoins is a good way to get rich persists on the internet. Is it theoretically possible for someone like you or me to invest at just the right time and get rich off a coin?Just as with traditional gambling, there are a tiny number of success stories, such as people like the “Moo Deng whale”, who turned $800 of Moo Deng coin (a memecoin referencing the viral pygmy hippo of the same name), into $10m.But only 0.4% of Pump.fun (the main memecoin trading platform) traders have made more than $10,000. About 0.002% have made more than $1m.Lutz told me: “There are a select number of people who’ve made quite a lot of money on these tokens, but they tend to be the same people. They tend to be people who are very well-connected, who are in specific group chats, and who have a lot of existing capital.”“You’ll always have more people losing than amounts of winners,” according to Gerard. “And the winners never shut up, so you think it’s a winning environment.”One of the main reasons people keep falling for these coins is that they think they’ve figured out the scam and invested early, before the rug pull or the dump. But this is never really the case.According to Gerard: “Crypto has been an ever-escalating series of get-rich-quick schemes, where a whole bunch of people think that they’re smarter operators than the previous operator, and generally they’re not.”Memecoin traders will often be invited to Discord and Telegram chats that are sold as “insider channels” where, according to Gerard, “they think they’ll hear about these scams before the rug is pulled – but actually they’re the suckers. Crypto is full of people who think they’re the scammer, not the sucker.”Young gullible menDespite all this, many people – especially young men – continue to invest in memecoins.Forty-two percent of men and 17% of women aged 18 to 29 have invested in, traded or used crypto, according to a 2024 Pew Research Center study, compared to only 11% of men and 5% of women over 50.“It’s no accident that memecoins are such a phenomenon among young people who have grown immensely frustrated with a financial system that, I think it’s fair to say, has failed them,” Lutz explained, “and where supposedly sure investments aren’t likely to give them returns that would give them the quality of life their parents had. Memecoins are nakedly meaningless, but there are many financial products, both in crypto and in the world of traditional finance, that may profess to have meaning, but at their core may be nearly as meaningless to young people.”This, too, is why memecoins have become popular with far-right, manosphere influencers and their fans.“It’s undeniable,” Lutz said, “that the trend in memecoin popularity among younger people – in particular young men – is part of the same trend where you’re seeing a loss of trust in institutions and a loss of confidence that traditional paths to success work out.”“These are the same tenets that have brought young men into the fold of the Maga-verse or to influencers like Andrew Tate. There’s overlap between them because they both stem from the same frustrations affecting so many young people, in particular young men, who feel more anger, bitterness, disillusionment and nihilism than a generation ago.”Some people don’t even seem to care that they’re being scammed, according to Lutz. “It’s remarkable to see the culture in these ecosystems, because someone will rug-pull a project – what you would consider to be a scam in that they’re running you out of the money – but that’s kind of an accepted practice and people are like, ‘Hey, good for them, I got screwed over, on to the next one.’”“There are too many cases to count of people who’ve lost their entire savings gambling on new coins. If you’re a gambler at a casino, there’s Gamblers Anonymous and an existing infrastructure to deal with people who are addicted to gambling. At casinos you have ‘no play’ lists in compliance with existing laws. There’s no existing infrastructure to aid people who lose all of their savings on memecoins.”Some memecoins try to claim that they’re more than just high-stakes gambling, in order to ensnare more willing buyers. These coins are often accompanied by the false promise of some kind of utility, be it “roadmaps”, “airdrops” ( free tokens given out for marketing purposes), off-chain value mechanisms, games where you can “spend” the coins, and various incomprehensible frameworks using the coin to vote or create some sort of ecosystem. The utility almost never materialises. $Batman coin promised to integrate “entertainment, gaming, and real-world utility”. Logan Paul’s $ZooToken supposedly allowed buyers to play a Pokemon-like game which never worked.The exception, the one memecoin to offer a tangible benefit in the real world, is the one sold by the president.President MemeOn 17 January, three days before his second inauguration, Trump launched his own memecoin, $Trump. At the time of writing, the coin’s market cap is over $2.5bn, spurred on by Trump offering a dinner and White House tour to the top owners of the coin, which took place last weekend.Unlike other memecoins, it offered something concrete: access to the president. This made its value soar.View image in fullscreenRight now, only 20% of the token’s total “supply” is currently in circulation. The remaining 80% is supposedly held by Trump and his business partners.Trump and his business partners are supposedly only allowed to sell off their holdings in $Trump when they are “unlocked” in tranches over time, according to their own made-up rules. As Gerard puts it: “They own the fake money, but they can’t sell it until it’s unlocked in tranches. Note that the limits are artificial. I mean, they could just ‘print’ more.”But already, “58 wallets have made over $10m each from President Donald Trump’s meme coin, totaling $1.1bn in profits”, while “764,000 wallets of mostly small holders have lost money on $TRUMP”, according to CNBC.Gerard said: “A lot of his own fans bought the coin. They thought it would be a fabulous success because Trump is a ‘business genius’. He ripped off his own fans.“The coins’ creators and original sponsors get free $Trump coins and they can dump those on the market at will every time a tranche is released. And they do. And are people ever going to make money on those $Trump coins they bought? Probably not. The money goes to the Trump family, and that’s the direction it was created to make it go in. So yeah, it’s a memecoin dump. He’s just dumping the coins on the suckers and it’s a textbook case.”Trump and his business partners also profit in transaction fees every time $Trump is traded, so far earning $100m.Whether this is all legal or not is up for debate, but soon after launching his own memecoin, Trump replaced the head of the regulator responsible for memecoins, the SEC, with a pro-crypto appointee.Lutz said: “In the last few months, the SEC has either dismissed or withdrawn all of its crypto-related lawsuits against every big crypto company in the United States and closed all of its investigations. I mean, the SEC is hosting roundtables almost every week with crypto companies, asking how it can be more helpful to the industry.”Trump has also enthusiastically supported a legal framework for stablecoins. Stablecoins are theoretically stabilised in value by being “pegged” to the value of another asset like the US dollar, but in reality have often become “de-pegged” and therefore unstable.Right now, the Stable Bill and the Genius Bill, which reference Trump calling himself a “stable genius” in 2018, are trying to make their way through Congress. They pave the way for the US government to use stablecoins to pay everything from housing grants to social security payments. And Trump himself just so happens to have a stablecoin of his own – through the World Liberty Financial company – which would shoot up in value if these bills pass, earning his family trust potential billions.The Trump family has a claim on 75% of net revenues from World Liberty’s token sales.“It is absolutely the government’s job to stop mis-selling of investments – that’s why ordinary retail mums and dads cannot buy into binary options,” Gerard said. “It’s absolutely open slather for crypto in the US now. This is really bad. A lot of people are going to get skinned. It’s going to be terrible.”The advice? Stay awayIs there any cause for hope? According to Gerard, while it may appear everyone is investing in memecoins, this is mainly exaggerated by the media. Sure, lots of young people have dabbled, but only the real crypto geeks are actually buying the things.“The good news is most people are not falling for it. And our evidence for this is the retail dollar trading volumes at Coinbase, the largest crypto dollar exchange. Coinbase happens to be a public company so that means they have to give accurate numbers to the SEC. So they disclosed their retail trading volumes. They’re down 17% in the first quarter of 2025 from where they were in December 2024. They’ve gone down with the Trump coin regime. That gives hope.”As far as my own memecoins go, even the Tate fans who invested appear to have become aware of the scam they fell for.Shortly after the stream went dead, I received an email from a Tate follower titled: “MATT SHAE WE NEED YOUR HELP.” He, along with other Tate fans, claimed they were victims of Tate rug-pulling them. They wanted me to help spread awareness of their community’s plight – by publicizing a new memecoin they had minted called $RRT (Real Rugger Tate).I didn’t write back. More
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The Guardian view on Trump’s conflicts of interest: the shadow of kleptocracy | Editorial
Donald Trump’s tour of Gulf nations this week is notionally state business. The president has discussed trade, investment and defence. But the boundary between statecraft and self-aggrandisement is blurred. To honour the US president, the government of Qatar has offered him a Boeing 747 aircraft. This “flying palace”, worth around $400m, would serve as a substitute for Air Force One as Mr Trump’s personal jumbo.The US constitution explicitly forbids anyone holding a government office from accepting any “present, emolument, office or title” from foreign powers without congressional consent. White House lawyers, obedient to their master, say the Qatari jet doesn’t cross that line.Accepting gifts from foreign regimes is not the worst constitutional violation committed by the Trump administration. The contempt for due process and rule of law in cases where innocent Americans have been abducted and deported for unproven and spurious immigration offences is more alarming.But corrosion of civil rights and flouting rules of financial propriety are symptoms of the same condition. Mr Trump doesn’t believe in submission to rules of any kind. He recognises no distinction between business conducted in the White House and deals done at Mar-a-Lago. On the eve of his inauguration, Mr Trump launched a crypto asset, $TRUMP, literally monetising the presidency. Last month, it was announced that the top 220 holders of the coin would be invited to dinner with the president.Previous occupants of the Oval Office sold investments or set them aside in blind trusts. Mr Trump’s business empire, managed by his sons, operates as before, except with the added commercial privileges that accrue to association with the most powerful man on Earth. Jared Kushner, his son-in-law, runs a private equity company that mostly deals with the state-backed investment funds of Gulf states that Mr Trump is visiting this week.The conflicts of interest are so densely woven that it is difficult to separate the presidency from the commercial ambitions of the presidential entourage. That is a defining feature of state capture in regimes that lack democratic safeguards and where law enforcement is incapable of policing corruption. It is an affront to the principle that public office should be sought with a view to advancing public interest, not exploited for personal enrichment. It is the mark of a kleptocracy.That is not incompatible with the more ideological side of Mr Trump’s project – the promise to make America great again. The president sees himself as a champion of the American people – an incarnation of a national will – so his soaring wealth is synonymous with collective greatness. But if ordinary Americans do not feel themselves enriched, they will turn resentful, perhaps wanting regime change, at which point the president may feel threatened by democracy and seek to disarm it.This is the cycle of authoritarianism permitting corruption, which in turn feeds more authoritarianism. Plenty of dysfunctional states have exhibited this pattern before, but rarely has it been displayed on a scale and a stage as vast as those available to a US president. More
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‘Just wildly illegal’: top Democrats push to censure Trump’s plan to accept Qatar jet
Top Democrats in the US Senate are pushing for a vote on the floor of the chamber censuring Donald Trump’s reported plan to accept a $400m luxury jet from the royal family of Qatar for use as Air Force One and later as a fixture in the Trump’s personal presidential library.Four Democratic members of the Senate foreign relations committee said on Monday that they would press for a vote later this week. They said that elected officials, including the president, were not allowed to accept large gifts from foreign governments unless authorized to do so by Congress.Cory Booker from New Jersey, Brian Schatz from Hawaii, Chris Coons from Delaware and Chris Murphy from Connecticut cast the reported gift of the Boeing 747-8 jumbo jet as a clear conflict of interest and a serious threat to national security.“Air Force Once is more than just a plane – it’s a symbol of the presidency and of the United States itself,” the senators said in a joint statement. “No one should use public service for personal gain through foreign gifts.”News of a possible gift of the luxury jet prompted immediate scathing criticism from senior Democrats. Though the Qatari government has stressed that no final decision has yet been made, Trump appeared to confirm it on Sunday when he commented on social media that the transfer was being made “in a very public and transparent transaction”.The plan appears to be for the 13-year-old plane to be fitted out by the US military for use as Air Force One and then, when Trump leaves the White House, for it to be put on display in his presidential library – in effect being handed to Trump for his own personal use.The reported arrangement comes as Trump sets off for a tour of the Middle East, including Qatar. Another of the countries on the tour, the United Arab Emirates, has also become embroiled in controversy over potential conflicts of interest involving Trump.Last week it was revealed that an investment firm based in Abu Dhabi had injected $2bn into a stablecoin venture launched by Trump’s World Liberty Financial crypto company as an investment into the crypto exchange Binance.Senate Democrats are also gearing up to challenge Trump’s conflicts of interest under congressional rules governing the sale of military weapons to foreign countries.Murphy, the senator from Connecticut who has been at the forefront of sounding the alarm over conflicts of interest in the second Trump administration, has said he will use his powers to challenge arms sales as a way of forcing a full debate and Senate vote on both the Qatar plane and UAE stablecoin issues.skip past newsletter promotionafter newsletter promotionHe said on social media that he would object to “any military deal with a nation that is paying off Trump personally – we can’t act like this is normal foreign policy”.He added: “UAE’s investment in Trump crypto and Qatar’s gifting of a plane is nuclear grade graft.”In an earlier post on Bluesky, Murphy described the idea of Qatar handing over the jet as being “just wildly illegal”.Trump has so far brushed aside the Democratic fury. He praised Qatar’s offer on Monday as a “great gesture” and said he would “never be one to turn down that kind of offer”. More
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Why are the Democrats greenlighting Trump’s crypto plans? | Corey Frayer
When Elon Musk’s “department of government efficiency” (Doge) gained access to treasury payment systems in February, Democratic party leadership pledged to protect government payments from Donald Trump’s influence. Chuck Schumer and Hakeem Jeffries held a press conference announcing the Stop the Steal act that would prevent the takeover of critical government payment infrastructure. On that very same day, high-profile Democrats joined with Republicans to introduce legislation allowing for payments to be made in cryptocurrencies called stablecoins. The bill paves the way for the US president to require that all payments to and from the government are made with cryptocurrencies, which could include the one he has a business interest in.After making millions off a “memecoin”, the crypto-opportunist-in-chief recently entered the burgeoning crypto-payments market by launching a stablecoin. For the uninitiated, stablecoins are crypto products that allege to hold the value of a currency like the US dollar and are intended to be used as digital payments. In fact, stablecoins constantly fail to hold their value, aren’t subject to federal consumer protections, and aren’t backed by the full faith and credit of the government. If a consumer’s stablecoins are hacked, fraudulently or accidentally spent, or lost due to a misplaced password, stablecoin companies will not reverse or reimburse those payments like a credit card company would. If a stablecoin company fails, consumers are not protected by anything like federal deposit insurance. Stablecoins have also become the preferred cryptocurrency for illicit finance.In an awkwardly playful nod to Trump’s crypto interests, bipartisan stablecoin bills have been introduced in the House and Senate entitled “Stable” and “Genius”, respectively, following Trump’s 2018 assertion that he is a “stable genius”. Sponsors of legislation claim their bills protect consumers, guarantee stability and curb their use in illicit finance. Many academics and experts disagree with those assertions. As they point out, the bills give crypto businesses such as the president’s access to the same payment system that banks and credit card providers use while subjecting them to far weaker standards than their traditional counterparts.Almost unbelievably, gutting consumer protections and privatizing the dollar may be the least concerning outcomes of stablecoin legislation. On 25 March, Trump issued an executive order mandating adoption of digital payments to and from the US government. That may sound innocuous, but the government already makes 95% of its disbursements electronically. The order doesn’t intend to modernize an already-modernized system. Musk exposed the order’s true intent when his Doge team took over the payment system, to the aforementioned alarm of congressional Democrats. He endorsed putting those payments “on the blockchain” – and in so doing, make public payments with private stablecoins.It’s not a hypothetical. The administration has already floated issuing $3.3bn in the housing department’s community development block grants via stablecoins. USAID has been instructed to make disbursements in stablecoins. And the treasury payments Musk was referring to? That’s $5.45tn in government payments from social security to veterans’ pay and pensions, federal employee salaries and income tax refunds. Americans might be forced to adopt cryptocurrencies whether they like it or not.The president has demonstrated his willingness to use the power of his office to enrich his family and friends and to provide favors to crypto business partners. Under Trump, SEC lawsuits against his crypto business partners Justin Sun and Binance have been halted. Just last week, Trump’s World Liberty Financial announced an opaque $2bn deal with a firm in the United Arab Emirates that is chaired by the UAE’s national security adviser, who is the brother of the country’s president. It’s naive to think Trump would shy away from using his power to shovel profits to the politically influential crypto industry, and his own crypto venture in particular.Crypto’s ascendant political influence may explain Democrats’ confusing pledge to stop Trump profiting from the presidency with one hand while pushing stablecoin legislation with the other. Conflicts of interest or not, the Democrats’ campaign arm continues courting crypto, though it doesn’t accept donations in cryptocurrencies. The Democratic Senatorial Campaign Committee chair, Kirsten Gillibrand, is a lead sponsor of the Genius bill. During the Senate banking committee consideration of Genius, news broke that Trump’s company was speaking with Binance about the launch of a stablecoin. It was as if the committee had called a recess for a word from its sponsor. Five Democrats still voted in support. House Democrats have sought amendments that would bar government officials from having a financial interest in such assets, but they’ve gotten little traction. This weekend, nine former Democratic supporters of the bill threatened to block further consideration unless concerns over issues ranging from money laundering to national security were addressed. But they said they remained “eager to continue working with our colleagues to address these issues”.The Democratic party has rightly pointed out that a sitting president’s conflicts of interest undermine the firmament of our democracy. Anyone, especially the president, who would use an office of public trust for personal benefit must be held accountable. Astoundingly, Democrats are poised to bless Trump’s crypto grift with the Genius act. If they do, it will be clear that, at least when it comes to crypto, they would rather endorse the president’s abuses than fight them.
Corey Frayer is the director of investor protection at the Consumer Federation of America and a senior adviser on crypto markets to the former SEC chair Gary Gensler More
