President Trump is facing backlash for launching two cryptocurrency tokens with first lady Melania Trump just days before the inauguration.
The move drew predictable criticism from political opponents, but there was also a mixed reaction within the crypto industry, with most welcoming his return to power and new support for the industry.
The digital currency industry has expressed optimism that President Trump will come up with more crypto-friendly policies, but recently President Trump's announcement of two Meme Coin tokens has prompted Trump to promote cryptocurrencies. Some fear it will cast the president's efforts in a negative light.
“It undermines the seriousness of President Trump's efforts to deregulate the crypto space because it makes him look self-serving,” said Nick Carter, founding partner at crypto investment firm Castle Island Ventures. said.
“It makes the industry look bad and kind of takes away some of the impact that President Trump was trying to have on the crypto industry,” added Carter, who is an avowed Trump supporter but said some He said he disagreed with the opinion. His crypto policy.
Both the White House and the company behind the meme coin immediately responded to The Hill's requests for comment.
But Trump himself dismissed concerns raised by his meme coin in remarks from the White House on Tuesday.
“I don't know much about it other than that we launched it. I heard it was very successful. I haven't confirmed it, but where is it today?” President Trump said.
“You've made a lot of money, sir,'' replied the reporter.
“How much?” Trump asked.
“It looks like it's been in the billions of dollars in the last few days,” the reporter said.
The president dismissed the comment, saying billions were “peanuts” to the people he spent the last few days with.
Meme coins are cryptocurrencies that are typically based on internet trends and have no inherent value. Its value can skyrocket when demand increases, making it a highly volatile asset.
President Trump announced his first meme coin, $TRUMP, last week. the value soared rapidly They jumped from $10 each to about $70 in the first 48 hours. Melania Trump announced another meme coin for her, $MELANIA, on Sunday, the day before Trump was sworn in as president.
$tramp traded at about As of Tuesday afternoon, it was trading at $43 and Melania at around $4.
These launches followed the first-ever “Crypto Ball” hosted by President Trump's artificial intelligence (AI) and crypto czar David Sachs on Friday, where he asked the crowd to ” “The reign of terror is over.”
Despite being skeptical of digital currencies in the past, President Trump has since embraced the digital currency industry, which had been at significant odds with the Biden administration over Washington's critical approach to cryptocurrencies.
President Trump is widely expected to issue executive orders related to cryptocurrencies this week, but it is not yet known what they will include.
The industry hopes Trump will introduce clearer and more transparent rules around cryptocurrencies, especially as hardline critics like former Securities and Exchange Commission Chairman Gary Gensler leave the field. I am doing it.
The tone in Washington is already tilting toward cryptocurrencies, with the SEC launching a Crypto Task Force on President Trump's second day in office.
The president nominated Paul Atkins, a former SEC commissioner and cryptocurrency advocate, to replace Gensler, and Trump and his sons launched a new cryptocurrency platform last year called World Liberty Financial.
After several scandals in Washington rocked the industry's standing, those in the crypto industry hope their work will be taken more seriously now that critics have been weeded out.
But some meme coins have tongue-in-cheek connotations, which observers suggested could threaten this goal.
“I don’t think a coin of this nature will increase the likelihood that cryptocurrencies will be taken seriously by mainstream financial participants,” said Steve Sosnick, chief strategist at brokerage Interactive Brokers.
“Throughout his career, Donald Trump has been masterful at turning his name into financial success. This is certainly the most recent, and perhaps most extreme…and his cryptocurrency… “You have to wonder how much of that spirit was behind the support for ,” he added.
Additionally, some industry insiders say the move could expose Mr. Trump to ethical scrutiny, given how much money he and his wife could make from the business. I'm concerned.
“Because this is different from a publicly traded security, anyone can now use Trump or Melania meme coins as a way to indirectly fund the government, Trump himself, or whoever is behind these coins in a very opaque way. “There's a clear risk of being able to buy one,” Carter said. .
Meme coins are often traded on decentralized exchanges where people can trade assets anonymously. As a result, monitoring trades becomes more difficult and creates gray areas as to what trade regulators and the public can see.
In some cases, Trump, Melania and the companies behind the meme coins may not be able to verify the purchaser, Carter said.
“The problem here is that most meme trading activity takes place on blockchains between trading partners who don't know who the other party is,” he says.
It is unclear whether Mr. Trump could face any legal challenges because of this conflict of interest, or whether he could be held liable if losses occur between traders. be.
“The real question is, are meme coins financial products at all? How are they different from baseball cards?” said Katherine Kirkpatrick Voss, general counsel at encryption software company StarkWare. .
There is still disagreement in Washington over whether meme coins and other crypto products should be classified as securities subject to the SEC or as products subject to the Commodity Futures Trading Commission (CFTC).
“There is considerable legal and regulatory uncertainty surrounding meme coins,” Boss told The Hill. “Cryptocurrency bars and the hope of cryptocurrencies are in contrast to meme coins, which operate in a gray area of regulatory uncertainty. I think it's about pursuing the person.”
It remains to be seen whether the hype surrounding the Trump family meme coin will continue.
“We have seen significant volatility in meme coins,” Boss said. “Only a very small percentage of meme coins actually prove to be able to maintain their value over the long term.”
Mr. Trump's meme coins likely attracted many traders who had never traded cryptocurrencies or meme tokens before, or who do not normally do so, and the potential for fraud and large losses for some. sexuality is increasing.
“If Trump chained together his supporters, who are probably less technologically sophisticated, to trade this, they would lose money, find a way to get hacked or lose their keys. It's the same,” Carter said.
Shehan Chandrasekera, head of tax strategy at Cointrack, said he was “shocked” and “a little concerned” to see the memecoin launch.
“You're setting a bad precedent because maybe Trump and Melania wanted to get the word out about cryptocurrencies. I don't know, but now professional fraudsters are trying to do the same thing. ,” he told The Hill. “Now they're like, 'If the president can do it, why can't I?'”
