Senator Elizabeth Warren is calling for an investigation into Donald Trump's memecoins. She has raised concerns about the ethical and legal implications surrounding these tokens.
In a letter dated January 22, Warren pointed out the launch of two memecoins, TRUMP and MELANIA, by Trump and First Lady Melania Trump. She believes these tokens could allow the Trumps to profit significantly from his presidency.
Warren, a key member of the Senate Banking Committee and known for her skepticism about cryptocurrency, stated that the memecoin has greatly enriched Trump. It also creates a way for the crypto industry to funnel money to him. Moreover, it allows anyone worldwide to speculate on Trump's political future.
She expressed concern that foreign leaders from hostile nations could buy these memecoins. This raises the possibility of untraceable foreign influence over the U.S. presidency.
Trump launched the TRUMP memecoin just days before taking office on January 20. It quickly surged to over $73, reaching a market cap of more than $14.5 billion. However, its value has since dropped by 57%, now trading around $32. Melania Trump introduced her token, MELANIA, a day earlier, which peaked at $13 before falling to $2.60.
Warren noted that the Trump Organization and its affiliates control 80% of the TRUMP memecoin. This leaves the remaining 20% of investors vulnerable to price fluctuations.
She also highlighted potential conflicts of interest. As president, Trump could appoint leaders of agencies that regulate the crypto market, raising questions about fair governance.
The letter was sent to several key figures, including the Director of the Office of Government Ethics and the Acting Chair of the Securities and Exchange Commission. Warren and Representative Jake Auchincloss are seeking answers by February 4 regarding the ethical rules for the Trumps' token holdings, tracking measures for foreign purchases, and protections for retail investors.
Representative Maxine Waters, the top Democrat on the U.S. House Financial Services Committee, referred to the Trump memecoin as the “worst of crypto.” Additionally, legal experts expect a wave of lawsuits related to the launch of the Trump family memecoins.
This week, ARK Invest CEO Cathie Wood stated she wouldn’t invest in tokens that lack utility. She mentioned that her firm has largely avoided memecoins, focusing instead on more established cryptocurrencies.