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    Trump’s crypto ventures may be his most dangerous moneymaking scheme | Mohamad Bazzi

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    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

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      Is every memecoin just a scam? Experts on whether Andrew Tate and Trump are fleecing their followers

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      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

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      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

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      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

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      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

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      Trump’s meme coin soars after he asks top 220 holders to dinner

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      The value of Donald Trump’s meme coin jumped by more than 50% on Wednesday after its official website said the coin’s top 220 holders would be invited to a private gala dinner with the president on 22 May.The top 25 holders of the coin would also get “an ultra-exclusive VIP reception with the president”, as well as a special tour, the website said.The coin, called $TRUMP, rose by more than 50% after the announcement to trade at about $14.70. It fell back slightly to $12.30 in early trading on Thursday, according to CoinMarketCap.Despite the sharp rise, the price of the president’s coin is far below the peak it hit shortly before his inauguration in January, when it soared from about $6 to $75. The launch of coins for Trump and his wife, Melania, have prompted experts to accuse the pair of “shameful” conflicts of interest.The sudden jump in Trump’s meme coin on Wednesday came as investors had been expecting the start of a process that allows more original investors and insiders to cash out their holdings. This “unlock” usually leads to a price fall but the coin’s X account said this would be delayed by 90 days.Meme coins are digital tokens inspired by trends such as viral moments and have no inherent utility. They typically fall in value after an initial strong rally.Last year, the “hawk tuah girl” Haliey Welch, made famous online by a viral video, launched a meme coin that was worth $490m in December but it quickly plummeted in value and is now worth just $2.9m.While Trump was sceptical of cryptocurrency in his first administration, he has since called himself the “crypto president” and promised to support growth in the sector.In March, he hired the venture capitalist David Sacks to act as an artificial intelligence and crypto tsar, as well as establishing a national stockpile of bitcoin and other cryptocurrencies.The Trumps have become actively involved in the cryptocurrency sector. The first lady also launched a meme coin in January, and last year the president and his three sons started a crypto platform called World Liberty Financial.Meanwhile, Trump Media and Technology Group, where the president is a majority shareholder, announced plans last month to work with the trading operation Crypto.com to provide investment products linked to crypto.This month the US justice department said it would disband a unit dedicated to investigating cryptocurrency-related fraud, as oversight in the digital assets sector began to loosen.The deputy attorney general, Todd Blanche, said the department would no longer pursue litigation or enforcement actions that had “the effect of superimposing regulatory frameworks on digital assets while President Trump’s actual regulators do this work outside the punitive criminal justice framework”.The deregulation has prompted influential congressional Democrats and watchdogs to warn about the growing risks to investors and the economy posed by multiple deregulatory crypto actions at federal agencies. More

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      Cryptocurrency will not save the Democratic party | Alex Bronzini-Vender

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      Twice rejected by American voters in favor of Donald Trump, the Democratic party now faces its most severe crisis of identity in four decades. Nowhere is the party’s search for relevance in Trump’s America more desperate than in its embrace of cryptocurrency, a sector whose existence depends upon its ability to circumvent the financial regulatory state the Democrats spent a century constructing. How else to explain the Democratic representative Ritchie Torres – whose South Bronx district is the poorest in the United States – joining forces with the Republican Tom Emmer to champion cryptocurrency through their newly formed congressional Crypto caucus.Congressional Republicans have always been uniform in their support for cryptocurrency: in May 2024, just three Republican House members voted against a bill to significantly relax regulations on digital tokens. But since 2016, the cryptocurrency industry has made steady inroads into the Democratic party. That convergence, if it continues, will represent a return to the pre-New Deal financial politics that the party spent a century rejecting.Throughout American history, the politics of money and financial risk have been central to party coalitions. Not since the election of 1896, however, have the Democrats been the party of deflationary, restrictive “hard money”. As the historians Anton Jäger and Noam Maggor explain, the de-facto fusion of the Populist party with the Democratic party transformed it into a vehicle for those who saw money not as a neutral store of value, but as a political instrument that could serve developmental ends – in this case, directing investment to credit-starved regions of the country.William Jennings Bryan’s defeat drove the party to moderate its more radical monetary positions. But notwithstanding the occasional inconsistencies, Democrats generally maintained the anti-deflationary stance established in 1896. Thirty years later, the Great Depression provided Franklin D Roosevelt with the mandate and the crisis necessary to complete this transformation: the United States abandoned the gold standard in 1933.“Consumer protection” in its contemporary form only truly entered the American political lexicon in the 1960s, but this period established the contours of America’s politics of financial risk. The Banking Act of 1933 (often referred to as Glass-Steagall) separated commercial and investment banking to protect ordinary depositors from speculative excesses. The Securities Acts of 1933 and 1934 imposed disclosure requirements on financial markets and established the Securities and Exchange Commission (SEC). Most critically, the creation of the Federal Deposit Insurance Corporation (FDIC) ended the era of devastating bank runs by insuring deposits.Collectively, these measures represented a fundamentally new relationship between citizens, banks and financial risk: the state would actively shape financial markets rather than simply enforcing contracts within them.The post-war era saw the Democratic party further articulate that approach to “market-making”. The Employment Act of 1946 declared it the government’s responsibility to maintain “maximum employment”, while the Federal Reserve, treasury, SEC and FDIC enforced financial stability through interest rate caps, capital controls and heavy regulation of financial institutions. While occasionally inefficient, these policies contributed to remarkable stability. As the economists Carmen Reinhart and Kenneth Rogoff have documented, the period from 1945 to 1971 saw virtually no banking crises in advanced economies.The Clinton administration’s financial deregulation – culminating in the repeal of the Glass-Steagall Act in 1999 and the deregulation of derivatives in 2000 – represented a significant retreat from these principles, and ended in the catastrophe of 2008. But, if only to offset the mounting risk they allowed the private sector to assume, the Clinton administration frequently sought to expand the FDIC’s responsibilities.Pro-crypto Democrats, from Torres to the disgraced New York City mayor Eric Adams, argue that cryptocurrency aligns with progressive principles. “Blockchain technology can liberate the lowest income communities from the high fees of the traditional financial system,” Torres said at an industry-organized summit last year. Kamala Harris herself appealed to cryptocurrency as an opportunity for Black men. But cryptocurrency, at its core, subverts the tools for economic management Democrats have championed for decades.The FDIC was created precisely because uninsured deposits catalyzed routine bank runs; cryptocurrency exchanges offer no comparable protection. The Federal Reserve’s sovereignty over the American monetary base enables it to expand the money supply during downturns to maintain employment; Bitcoin’s fixed supply explicitly rejects this responsibility. The SEC was established because unregulated securities markets harmed ordinary investors; cryptocurrency’s decentralization enables exchanges like Uniswap to operate outside its protective frameworks.The industry’s “political investments” – to borrow the political scientist Thomas Ferguson’s terminology – are an undeniably defining force in American politics. By some counts, nearly half of all corporate campaign contributions in 2024 came from the crypto sector. But despite Kamala Harris’s substantial concessions to the industry, the top three crypto PACs leaned red by a margin of nearly 2:1. Harris’s promises to the industry were never enough to outweigh the Trump campaign’s proposal, running since late July, to enshrine crypto as a “permanent national asset” through a national bitcoin “stockpile”.Modest deregulation is simply not what crypto is in the political game for. It requires nothing less than the seizure of the American state. And until Democrats can outmatch Trump’s handouts to the sector, crypto will stay with the Republican party.Volatility is the basic roadblock to crypto’s further adoption. It is simply too risky for most people. No amount of regulatory tweaks will change that fundamental affliction: as long as cryptocurrencies are predominantly held as investments rather than used for transactions, their prices will remain highly sensitive to investor demand fluctuations. And the absence of traditional stabilization mechanisms, like central banks or reserve assets, contributes to the high volatility of crypto tokens. Put simply: if crypto is to grow, it’ll need both state backstopping and displacement of the traditional banking system altogether.Trump has set about doing exactly this. His administration’s recently established “strategic bitcoin reserve” is, in effect, a state backstop for cryptocurrency. But the Trump administration’s designs extend far beyond “de-risking” crypto: their goal, as the political economist Martijn Konings observes, appears to be the destabilization of the traditional banking system itself.At the behest of Elon Musk’s s0-called “department of government efficiency” (Doge) – itself named after Dogecoin, Musk’s cryptocurrency of choice – the Trump administration’s “deferred resignation” packages and layoffs have already reduced the FDIC’s workforce by 10%. And Trump issued an executive order in mid-February requiring that the formerly independent agency submit to White House oversight.The Trump team has floated replacing the already enervated FDIC with a gutted insurance scheme housed in the treasury, merging it with the office of the comptroller of the currency, or simply defanging it through mass layoffs and employee transfers. In either case, tighter executive control over banks’ balance sheets will render the financial system’s solvency contingent upon whether a particular bank is favored or disfavored by the president. It’s easy to imagine a resulting loss of confidence in the traditional banking system – an outcome that crypto advocates believe would work to their advantage.If the Democrats wish to outcompete the Republican party for crypto dollars, then, they’ll need to offer the “industry” much more than deregulation. They’ll have to become active participants in engineering a return to the pre-New Deal politics of money and financial risk – the very positions against which the modern Democratic party defined itself. That would be a capitulation unprecedented even in the Democratic party’s long history of betraying the American working class.

      Alex Bronzini-Vender is a writer living in New York More

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      Trump to host crypto leaders after creating strategic reserve of bitcoin

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      Cryptocurrency industry elite are set to meet with Donald Trump at the White House on Friday to discuss how the government will enact Trump’s vision of making the country the “crypto capital of the world”. The day before, the president signed an executive order creating a strategic reserve of cryptocurrency for the United States.Trump will host players including Michael Saylor, co-founder and the executive chair of MicroStrategy, and Zach Witkoff, one of the founders of the president’s own crypto business, World Liberty Financial, according to the executives’ social media posts.Vlad Tenev, the CEO of Robinhood Markets, will also attend, according to a spokesperson for Robinhood. Witkoff and Saylor did not respond to requests for comment. Attenders expect the event to focus on Trump’s plans to build the strategic reserve, which the president said will contain bitcoin and four other coins. Trump directed the secretaries of treasury and commerce to develop “budget-neutral strategies” for acquiring additional bitcoin that have no “incremental costs” on taxpayers.“For the first time, industry leaders feel they’re walking into a collaborative discussion,” said Les Borsai, co-founder of Wave Digital Assets, a crypto investment adviser, who said he did not receive an invitation.Participants said they were focused on any further details on the strategic reserve, a government stockpile of crypto assets.The reserve will be capitalized with bitcoin owned by the federal government that was forfeited as part of criminal or civil asset forfeiture proceedings, the White House “crypto czar”, billionaire David Sacks, said in a post on social media platform X.“This [strategic reserve] is going to be the biggest point of contention for many of us,” said JP Richardson, co-founder and CEO of Exodus, a bitcoin wallet developer. Although he owns the four other coins that Trump has suggested including in the reserve, he does not think they have a place in a strategic reserve.“Crypto has made big strides, but it’s still a relatively nascent industry,” Richardson said. The other coins are smaller and function in a very different way, one he said may create more risk. Brian Armstrong, co-founder and CEO of Coinbase, posted on X on Sunday that a bitcoin-only reserve was “probably … the best option”. Both Richardson and Armstrong will attend the summit.In a post on X, Brad Garlinghouse, the CEO of Ripple, who also confirmed his attendance at the summit, hailed Trump’s recognition that “we live in a multichain world” stretching beyond bitcoin. XRP, the coin tied to Ripple, is one of the four other cryptocurrencies Trump has suggested may be added to a crypto reserve. Attendees said they were optimistic about working with an administration that views crypto as a mainstream asset class and expressed hope for a straightforward regulatory process.skip past newsletter promotionafter newsletter promotion“What everyone really needs to have at this point is clarity on what the level of scrutiny and intensity of regulation will be, who the key regulators will be,” said Yesha Yadav, the associate dean and a professor of law at Vanderbilt University. That could speed up the process of approval by the Securities and Exchange Commission of a flurry of new listings of exchange-traded funds.Trump’s family has launched cryptocurrency meme coins and he also holds a stake in World Liberty Financial, a crypto platform, which has sparked some conflict-of-interest concerns. His aides have said Trump has handed over control of his business ventures, which are being reviewed by outside ethics lawyers. The White House did not respond to a request for comment. More

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      Crypto giant Tether CEO on cooperating with Trump administration: ‘We’ve never been shady’

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      Paolo Ardoino, CEO of the cryptocurrency company Tether, was flying over Switzerland last week as he contemplated the changing regulatory landscape.Tether used to be at war with the establishment. Now it is the establishment.The crypto giant – tether is the most traded cryptocurrency in the world – has had a strange trip. Four years ago, banks were dropping Tether as a client, and regulators in New York had the company against the wall over questions about commingled client and corporate funds. Treasury officials were complaining that dollar-backed cryptocurrencies enjoyed the international privileges of the dollar without the responsibilities of preventing its misuse. Federal investigators were looking into Tether for possible violations of anti-money-laundering and sanctions rules.The cryptocurrency industry anecdotally – and conspiratorially – describes the Biden administration’s posture toward crypto as a systematic effort to debank crypto in the form of tactics such as “Operation Choke Point 2.0”. Ardoino says Tether’s leadership needed to become globetrotters in search of someone to take their business.And it’s a lot of business. Tether currently is the 17th largest holder of US government debt, with nearly as much in treasury bonds in its digital vaults as Saudi Arabia. Tether’s value remains stable because it is pegged one-to-one to the dollar, meaning the value of each individual tether coin is $1. The company backs the total value of the cryptocurrency with dollar assets like treasury bonds in an American bank – in this case, $140bn deposited with Cantor Fitzgerald.Tether comes just behind bitcoin and ethereum as the most valuable cryptocurrency, and by most measures it is the most widely traded. Investors in countries with unstable currencies, like Turkey or Argentina with their 40%-plus inflation rates, use it to hold on to the value of their savings against the dollar. Crypto traders use tether to park their digital assets in a safe place.The degree of cooperation between Tether and law enforcement reflects an evolving shift in the government’s posture toward the company, even as federal agencies had been cracking down on cryptocurrency more broadly under Joe Biden.“We’ve never been shady,” Ardoino said. “The company has been great. It has been attacked. Debanked. You know, when you’re trying to be a disruptor – in a good sense – you are going to always be attacked by the establishment.”Previous administrations’ hostility to crypto – and perhaps to tether in particular – was the product of strategic mistakes the company had made, Ardoino said.“We were very naive. We thought: ‘Oh, we are going to keep our head down.’ We were not communicating. We were not telling what’s going on, and that was used against us,” he said. “And that’s fair, right? So, if someone is not communicating, or you feel is not transparent enough, then that is how people get to fear.”After settling its case with New York regulators in 2021, Tether began to come out of its shell, publishing quarterly statements and expanding its cooperation with the government. Today, things are different for Tether. Its banker – the Cantor Fitzgerald CEO Howard Lutnick – has been confirmed as secretary of commerce in the Trump administration. The company says it is proud of its cooperation with US law enforcement. Though Tether’s holding company is headquartered in crypto-friendly El Salvador, the cryptocurrency is expanding in a way that Ardoino says will help the United States secure its position as the world’s reserve currency.“We have 400 million users in emerging markets,” Ardoino said. “We are basically selling the US debt outside the US … We are decentralizing the US debt as well, basically pushing for dollar hegemony. That’s how the US can maintain its dominance when it comes to its currency.”It’s a line Lutnick might have written into his confirmation hearing speech himself. The Senate confirmed Lutnick on a party-line vote 51-45 in February. Ardoino said their relationship is at arm’s-length now, though.“Cantor [Fitzgerald], they are our custodian. So, we will continue to have this relationship with Cantor,” he said. “They have been a great custodian for us. They are primary dealers, so we can have basically direct access to the Fed[eral Reserve] to purchase [government] debt. With Howard, when he goes into government, we cannot talk to him.”Lutnick has been a vocal backer of cryptocurrency and tether’s position in the industry in particular. Senators had some sharp questions for him about tether at his 29 January hearing, with Senator Maria Cantwell pressing him about audited holdings.“Do you think the market needs to comply with audits about whether one-to-one ratios really exist on stablecoins?” Cantwell asked Lutnick.“I believe stablecoins, US dollar stablecoins, should be audited, should be completely backed by US treasuries 100%,” Lutnick replied.skip past newsletter promotionafter newsletter promotion“How do we prove that?” Cantwell then asked.“A US audit and one-to-one backed by US treasuries,” Lutnick continued. “And lastly, you can’t change the rules; meaning if someone has bought the stablecoin, you can’t change the price. If someone’s made a deposit with you, you can’t say: ‘I’m going to withdraw, you’re going to change the price.’”She also asked about reports that “as much as $19bn of Tether could be illicit activity by the North Koreans, the Russians, the Chinese. And so, what do we do about that? What is your solution?”“It’s like blaming Apple because criminals use Apple phones,” Lutnick replied. “It’s just a product. We don’t pick on the US treasury because criminals use dollars. So, I think it’s just a product … They are signed up with all US federal law enforcement. They follow all federal law enforcement instantly.”Ardoino rejects the suggestion of tether’s usefulness to criminals. “There is no financial institution – even the big banks, they don’t have this breadth of collaboration,” he said, citing more than 200 agencies in 50 countries that work with Tether.A Swiss bank might rebuff an American law enforcement agency coming for money in its accounts. Tether, however, touts its ability to return money stolen from others. For example, a notable “pig butchering” scam last year sent Shan Hanes, CEO of Heartland Tri-State Bank in Elkhart, Kansas, to a 293-month federal prison term for embezzling $47.1m and sending it overseas as cryptocurrency. Tether was able to recover $8.3m for the victims.The traditional banking system is more porous than a cryptocurrency wallet right now, Ardoino argued.“When [criminals are] finally trying to use blockchain and move money on the blockchain in USDT [tether’s trading symbol], we see them and we freeze them,” he said. “And it takes 15 minutes to freeze an address from our stock. We are much more granular and faster than any bank or any other financial institution. So, I’ve been saying very loudly and publicly that any criminal using USDT is a very stupid criminal, because we can see everything and we can catch it.”Ardoino does see a threat in an adversarial regulatory relationship toward crypto, both in the United States and Europe. Both Coinbase, the largest cryptocurrency exchange in the US, and EU-based exchanges removed USDT because it does not comply with the EU’s Markets in Crypto-Assets regulation, which went into effect at the end of 2024. Traders can hold Tether in non-custodial wallets but can’t trade it on an exchange that complies with European regulations.“I think that the US understands very well that they should very, very much avoid a DeepSeek moment for finance and crypto,” Ardoino said, suggesting that it is possible that some invention in a stealth-mode lab somewhere beyond the industry’s attention could radically change the competitive environment. Ardoino was referring to the Hangzhou-based startup DeepSeek, a large language model AI that emerged seemingly from nowhere in January that could compete with Meta and OpenAI’s offerings at a fraction of the cost. Its emergence is disrupting AI business plans by changing the competitive environment.Ardoino hopes the new administration will have settled on its approach to regulations – likely to be much friendlier than its predecessor’s – by September, he said. “I think that they want to get regulations done by June. June would be very aggressive as a timeline, but September is realistic.” More