Meme coins: Donald and Melania Trump launch cryptocurrency ahead of inauguration, raising serious ethical concerns

CNN
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The incoming first couple has launched a pair of meme coins in the run-up to President-elect Donald Trump’s inauguration, which are already worth billions of dollars on paper. But the timing of Trump’s cryptocurrency launch, just days before he took office and promised to be a crypto-friendly president, alarmed ethics experts and even some in the crypto industry.

Melania Trump launched her cryptocurrency $MELANIA in a posts on social media On Sunday, sending her husband’s cryptocurrency $TRUMP, announced two days earlier, plummeted.

“The official Melania Meme is live! You can buy $MELANIA now. wrote the future first lady X Sunday.”

Meme coins are a type of highly volatile cryptocurrency inspired by popular internet or cultural trends. They have no intrinsic value, but can rise or fall in price.

“My NEW Official Trump Meme is HERE!” Trump wrote X on Friday. “It’s time to celebrate everything we stand for: WIN! Join my very special Trump community. GET YOURS $TRUMP NOW. Go to – Have fun!”

Both coins are traded on the Solana blockchain. The Trump meme coin soared over the weekend, trading at more than $70 by Sunday afternoon, according to CoinGecko.

But the president-elect’s coin dropped to $40 after Melania unveiled her own coin. It has since recovered some of those losses and was trading around $60 early Monday. $MELANIA was trading just above $12 early Monday, according to CoinGecko.

$TRUMP is the first cryptocurrency endorsed by the president-elect, who once dismissed bitcoin as “based on thin air.”

Trump received strong support from the crypto industry this election after he embraced crypto and promised America it “Crypto capital of the planet.”

In July 2024, Trump addressed crypto’s largest convention and has since appointed Howard Lutnick, who backs cryptocurrency company Tether, to lead the US Department of Commerce. Lutnick is among other crypto-enthusiasts named for Trump’s next administration.

Now Trump will not only preside over how the federal government will regulate crypto, he can personally cash in on the outcome.

“I think it’s very dangerous that the people who are supposed to oversee the regulation of financial instruments are investing in them at the same time,” Richard Painter, a law professor at the University of Minnesota, told CNN. “There is no precedent for a head of state to launch a personal cryptocurrency.”

Painter, the top ethics lawyer in the George W. Bush administration, said launching the meme coins hours before the inauguration raises “serious ethical questions about conflicts of interest.”

“The coin’s value may be affected by his actions or policies while in office, especially since Trump has said he will be more crypto-friendly, which is likely to increase the coin’s value further, at least temporarily,” Painter said.

While executive branch employees must follow criminal statutes that prevent them from participating in matters affecting their own financial interests, the law does not apply to the president or vice president.

The Trump coin was announced on Friday, the last working day before the resignation of Gary Gensler, the outgoing chairman of the Securities and Exchange Commission and an enemy of the crypto industry. Trump had promised to replace Gensler, who announced in November, he would resign at noon on Inauguration Day.

Walter Shaub, the ethics watchdog who clashed with Trump in his first term before resigning, sounded the alarm about Trump’s second term.

“America voted for corruption, and that’s what Trump is delivering,” Shaub told CNN in an email. “Trump’s corruption and bare-bones profiteering is so open, extreme and widespread this time that to comment on any aspect of it would be to miss the forest for the trees. The very idea of ​​government ethics is now a smoldering crater.”

California Rep. Ro Khanna, a Democrat, said in a post on X that elected officials “should be barred by law from holding meme coins,” describing them as “highly speculative and like gambling.”

Trump’s transition team did not immediately respond to a request for comment.

Earlier this month, the Trump Organization announced that Trump will not be involved in managing his real estate and branding empire during his first term in office and appointed an outside ethics monitor to keep an eye on the company’s actions. Past presidents have taken more significant steps to avoid conflicts of interest and the appearance of self-dealing, including by placing their companies in blind trusts.

Anthony Scaramucci, a former Trump official turned critic, said in a post the X that the “most dangerous” thing about the Trump coin is that now “essentially anyone in the world can deposit money” into the US president’s bank account with just a few clicks.

“Every service – geopolitical, corporate or personal – is now for sale, right out in the open,” said Scaramucci, who is a supporter of the crypto industry.

Some others in the crypto industry were alarmed by the timing of the Trump move.

“Trump owning 80% and timing the launch hours before the inauguration is predatory and many are likely to be hurt by it,” said Nick Tomaino, a former Coinbase executive in a post at X. “Trump should vent to the people instead of enriching himself or his team on this.”

Crypto investor Nic Carter, who has described himself as a Trump supporter, told Politico it’s “absolutely absurd” Trump would do this.

The Trump coin’s market capitalization, based on the 200 million coins in circulation, is capped at $13 billion, according to CoinMarketCap. The meme coin website said there will be 1 billion Trump coins over the next three years.

Both $MELANIA and $TRUMP’s websites contain disclaimers stating that the coins are “intended to act as an endorsement of and engagement with” the values ​​of their respective brands and “are not intended to be, or be subject to, a investment opportunity, investment contract or security of any kind.”

The website says the meme coin is not politically affiliated. But 80% of the coin’s supply is owned by Trump Organization associates CIC Digital and Fight Fight Fight LLC, both of which are subject to a three-year unlock plan – so they can’t sell all their holdings at once.

The Trump coin’s fully diluted value (reflecting the final total supply of Trump coins) was around $54 billion on Monday morning, according to CoinMarketCap. At that value, the 80% tied to Trump is worth a staggering $43 billion, at least on paper.

The $TRUMP coin’s website says it’s “the only official Trump meme.”

“Now you can have your piece of history. This Trump Meme celebrates a leader who does not back down against the odds,” the website reads.