Elizabeth Warren joins call for probe of Trump over crypto tokens

Senator Elizabeth Warren has asked US financial regulators and the government ethics office to probe the ethical and legal concerns around Donald and Melania Trump’s crypto tokens.

“We write with deep concern about the decision by President Trump and First Lady Melania Trump to launch two memecoins, TRUMP and MELANIA, that allow them to earn extraordinary profits off his Presidency,” Warren wrote in a Jan. 22 letter.

Warren, a top Democrat in the Senate Banking Committee who is known for her crypto skepticism, said the memecoin “has massively enriched Trump personally, enabled a mechanism for the crypto industry to funnel cash to him, and created a volatile financial asset that allows anyone in the world to financially speculate on Trump’s political fortunes.”

She also claimed that “leaders of hostile nations” can covertly buy these memecoins, “raising the specter of uninhibited and untraceable foreign influence over the President of the United States.”

Trump launched the Official Trump (TRUMP) memecoin in a surprise move days before he took office on Jan. 20. It surged to an all-time high of over $73 a day after launch — with its value reaching over $14.5 billion — but has since dropped 57% to trade around $32.

Trump’s wife, Melania, launched her own token, Melania Meme (MELANIA), a day after her husband on Jan. 19. It hit a peak of $13 before falling to $2.60.

Excerpt of Warren’s letter on the Trump family’s memecoins. Source: Senate Banking Committee

The senator also cited conflict of interest concerns, stating that as president, Trump will nominate leaders of agencies that regulate the crypto sector, raising questions about impartial governance.

The letter was addressed to Office of Government Ethics Director David Huitema, Acting Securities and Exchange Commission Chair Mark Uyeda, Acting Treasury Secretary David Lebryk and Acting Commodity Futures Trading Commission Chair Caroline Pham.

Warren and Representative Jake Auchincloss are seeking answers from the regulatory heads by Feb. 4 regarding ethical rules applicable to the Trumps’ holdings in the tokens, measures to track and regulate foreign or illicit purchases, legal definitions and regulatory authority over memecoins, and protection mechanisms for retail investors.

Representative Maxine Waters, the US House Financial Services Committee’s top Democrat, said on Jan. 20 that the Trump memecoin represented the “worst of crypto.” 

Meanwhile, lawyers are also expecting a flood of lawsuits to pile up over the launch of the Trump family memecoins. 

This week, ARK Invest CEO Cathy Wood said she wouldn’t be investing in these types of tokens with no utility. “We’ve pretty much stayed away from the memecoins. We’re very focused on the big three,” she said.