Why Trump’s Meme Coins Have Alarmed Crypto Insiders and Legal Experts alike

WWhen Donald Trump won the presidency in November, many crypto fanatics celebrated, based on his promises to the industry that he would prioritize deregulation and legitimize crypto entrepreneurs. Days before his inauguration, industry heavyweights gathered in Washington for the Crypto Ball, celebrating their newfound status as DC insiders.

But during the event, Trump shocked almost the entire room past online postings about the launch of a new cryptocurrency called TRUMP. This new currency, a so-called meme coin, has no intrinsic value, but rather fluctuates in price as people buy and sell the coin. Trump’s fans and opportunistic day traders have generated billions of dollars in sales, driven by loyalty, hype and the chance to make a quick buck. All of these deals have netted the coin’s creators—affiliates of the Trump Organization—billions of dollars on paper. A day after its release, Melania Trump announced her own meme coin, which also rose and fell in crazy waves. TRUMP was the 25th most valuable cryptocurrency in the world on Wednesday, according to CoinMarketCap— though the price of around $43 was a far cry from the lofty $75.

Read more: What Trump’s Victory Means for Crypto.

Trump’s meme coins brought a wave of attention to crypto and many newcomers to the space. For some, the coins signaled Trump’s commitment to crypto and to spurring growth. But many more in the crypto world reacted with disgust at what they saw as a money safe and a way for Trump to directly profit from his followers. Trump’s team has at least 80% of the coin’s supply, giving them great power to control the price. Even if they are not allowed to sell off their holdings for months, it would crash the market and leave ordinary users with losses.

Crypto insiders worry that the coins will make the public even more skeptical in an industry already riddled with scams and actors in bad faith. “The crypto sector put someone in power whose first act is to emphasize and exploit the opportunity for grift in crypto,” says Angela Walch, a crypto researcher and writer. “And it’s just embarrassing.”

Trump has downplayed his role in the launch of the coin, saying at a January 21 press conference: “I don’t know much about it other than I launched it.” The Trump Organization did not immediately respond to a request for comment. A White House press official declined to comment.

But elected officials and legal experts are raising ethical and geopolitical concerns about tokens, which they say could serve as a vehicle for bribery and conflicts of interest. “These coins open a channel for him to receive financial benefits from foreign adversaries and to prioritize his personal interests, to the collective detriment of Americans,” said Puja Ohlhaver, a lawyer affiliated with Harvard’s Allen Lab for Democracy Renovation.

What are meme coins?

TRUMP and MELANIA are meme coins: cryptocurrencies essentially created by entrepreneurs out of thin air by writing code to deploy on a blockchain. Their value comes from how much people believe in them and buy them. To generate excitement, the teams behind such coins often market them using popular memes that can be shared and repeated on social media. If social media memes can drive culture, creativity and even ideologythe thinking goes, why shouldn’t they also be worth something financially?

Dogecoin and Shiba Inu are two examples, with Dogecoin notably powered by Elon Musk, whose tweets about the coin have suffered to price increases. The lack of intrinsic value makes meme coins particularly volatile and speculative, which for some is part of their appeal: if investors buy at the right time, they can make a lot of money. Conversely, they can lose everything extremely quickly if they buy into the top of the market. Meme coins have also been the vehicle for alleged scams where investors lost significant sums.

Trump’s admirers have often used memes as a marketing tool. During his presidential campaign, a team of content creators flooded social media with pro-Trump meme content. Last summer, unofficial Trump meme coins with names like Pepe (TRUMP) and Maga People Token (PEOPLE) rose and fell, with some players treating them as proxies for his chances of victory.

Trump also has a history of using crypto to make money. He started selling NFT trading cards in 2022, and has earned millions from them, according to financial information documents. In September he launched World Liberty Financiala cryptocurrency platform which is not yet live. And in 2025, meme coins might be the easiest way for aspiring crypto-entrepreneurs to make money fast.

TRUMP begins to act

On January 18, two days before taking the oath of office, Trump launched his token via CIC Digital LLC, a subsidiary of the Trump Organization, while the Crypto Ball was in full swing. The move caught the industry by surprise. Nick O’Neill, a crypto entrepreneur at the event – which also featured appearances from Snoop Dogg and Speaker Mike Johnson –posted a video on X says that very few people there were aware of the token.

The next day saw a mad rush to buy and sell the token, causing all sorts of knock-on effects. Solana, the blockchain underpinning the token, and Coinbase, an exchange used to trade the coin, both saw hours-long transactions delays. “We did not anticipate this level of increase,” Coinbase CEO Brian Armstrong wrote on Twitter.

Within a day, the team controlling the token, led by CIC Digital, owned tokens worth something 51 billion dollars on paper. (However, this number is not realistic, because the more they tried to pay out in actual dollars, the more the price would drop.). Later that day, however, Melania Trump released her own meme coin, MELANIA, which effectively deflated TRUMP’s market cap by billions of dollars as traders appeared to sell their holdings to buy into the new coin. Within an hour of MELANIA’s launch, TRUMP fell from over $70 to around $45. A fake BARRON memecoin unrelated to Trump’s youngest son also accumulated a market cap of $460 million before falling 95%.

Some of Trump’s staunchest supporters from the crypto world accused him of predatory behavior in connection with the coin’s launch. Crypto is supposed to defend the concept of decentralization; The President’s team controls at least 80% of the TRUMP token supply. Another blockchain analytics company, Bubblemaps, found that 89% of MELANIA’s token supply was in a single crypto wallet. Conor Gregor, a Coinbase executive, wrote on Saturday that Trump’s team alone had earned $58 million in trading fees.

“Trump’s credibility has been totally destroyed,” wrote Michael A. Gayed, an investment manager. Anthony Scaramucci, Trump’s former White House communications director and a crypto-evangelist, wrote: “Nobody can honestly think this is good for our society.”

“There’s a lot of soul-searching in the industry right now,” says Walch. “Fine, we gained power, but did it serve any purpose that we originally set out to achieve?”

Ethics and national security concerns

Critics outside of crypto also raised ethical concerns. Trump now has a direct stake in an industry he is responsible for regulating. (The controlling companies, which are subsidiaries of Trump’s business, wrote that Trump tokens “are not investments or securities, but are an ‘expression of support'”). The president’s crypto windfall, critics suggest, is discouraging him from cracking down on the industry, which could cause his tokens to drop in value by billions of dollars. Representative Ro Khanna, a California Democrat who is one of the leading crypto supporters in Congress, wrote X that “elected officials shall be barred from holding meme coins by law.”

Some critics worry that these tokens represent a threat to national security because they allow foreign agents to purchase large amounts of the token as leverage over Trump’s policy decisions. These agents could buy tokens to win Trump’s favor — or threaten to sell them off, which could crash the token’s price. They could also use cryptographic techniques to hide their identity from everyone in the world except Trump, says Allen Lab’s Ohlhaver.

The Founding Fathers tried to prevent this kind of conflict of interest with the emoluments clauses in the Constitution, which prevent a president from using their office to enrich themselves. (At the time, gift giving was a common corrupt practice among European rulers and diplomats.) Some argue that the fact that Trump’s token launch occurred before he was sworn into office means he was acting as a private citizen. “It’s less complicated for them to launch these BEFORE he officially becomes president,” crypto journalist Zack Guzmán wrote on X. “Claiming that Trump is profiting from the presidency and violating the Emoluments Clause would have been much easier if not.”

But Ohlhaver argues that as long as Trump owns a stake in the tokens, there is a significant conflict of interest. “He still owns tokens, which will increase in price if a foreign adversary pumps it,” she says. Ohlhaver also says the Trump meme coin threatens our public understanding of money at its core. “With the advent of social media and global social networks, it’s very easy to leverage your status and influence to make a new kind of money and legitimize it,” she says. “It is important for us to preserve our national public goods and ensure that they serve our common interests, rather than the narrow interests of an elite who will benefit enormously at the expense of everyone else.”

Andrew R. Chow’s book on crypto and Sam Bankman-Fried, Cryptomaniawas published in August.