Senator Elizabeth Warren and Rep. Jake Auchincloss demand U.S. regulators investigate President Trump’s TRUMP and MELANIA meme coins.
In a letter addressed to multiple federal agencies, including the US Office of Government Ethics, the SEC, the Treasury and the CFTC, Warren and Auchincloss outlined several concerns regarding the Trump family’s line of meme coins.
One of the main concerns raised in the document is the potential ethics violation that comes with the mass token launch, as basically anyone in the world could purchase TRUMP (TRUMP) and boost the President’s net worth, including “secretive foreign buyers seeking to curry influence with the administration.”
“Anyone, including the leaders of hostile nations, can covertly buy these coins, raising the specter of uninhibited and untraceable foreign influence over the President of the United States,” wrote Warren and Auchincloss in a joint letter.
In the document, the pair noted that Trump and his wife’s combined net worth has surged to $58 billion overnight, thanks to the meme coins named after them which now represent nearly 90% of the 47th President’s net worth. They also claim the Trump organization has gained a profit of $58 million in trading fees alone by Jan. 20.
Launched on Jan. 18, the weekend before Trump’s inauguration, the official Trump meme coin reached a market cap of more than $10 billion in less than 24 hours after its launch. However, its value has since crashed by more than 50%, from $73 to $34. According to data from crypto.news, TRUMP’s market cap currently stands at $6.8 billion.
Meanwhile, MELANIA (MELANIA) suffered an even greater loss. Despite bouncing to an all-time high of $13 on launch day, the token’s value has since fallen by 80% to only $2.56.
Are TRUMP and MELANIA heading towards a rug-pull?
In the letter, Warren and Auchincloss noted that the Trump meme coins came with a disclaimer that say the “Trump Memes” are only meant to be symbol of support for Trump’s ideals and beliefs and are not considered “the subject of, an investment opportunity, investment contract, or security of any type.”
“The terms and conditions of both TRUMP and MELANIA purport to indemnify the coins from any fraud-related claims and
prevent purchasers from joining class action lawsuits against the coin or its issuers,” wrote Warren and Auchincloss in the letter.
They questioned whether this disclaimer was enough to exempt the meme coins from federal law, deterring investors from filing complaints in the event of a major loss. However, they asked regulators if they would commit to investigating the tokens if investors did file complaints.
The pair claimed that 80% of the TRUMP meme coins are reportedly held by CIC Digital and Fight Fight Fight LLC, two companies affiliated with the Trump Organization, citing a CNN report. They alleged that these organizations could easily sell their holdings and gain enormous profits, while simultaneously triggering a sharp decline in the coin’s value leading to major financial losses for other investors.
As previously reported by crypto.news, Chainalysis found that around 60 wallets hold the majority of the funds generated by the TRUMP token. The firm also noted that over 77% of TRUMP-holding wallets made a profit worth less than $100.
