On Monday, the 220 winners of a cryptocurrency contest were informed to expect an email containing “the most exclusive invitation in the world.” These individuals, who have invested substantial amounts—sometimes millions—will receive the opportunity to attend a private gala with former President Donald Trump at his golf club in Washington, D.C., later this month. This move raises significant ethical questions, as it appears to exchange access to a former president for financial investment in his cryptocurrency venture, which is just one of many instances during Trump’s political career where his business interests have intermingled with his public service.
The implications of Trump’s involvement in the cryptocurrency sector amplify existing concerns about conflicts of interest. Critics argue that he is utilizing his former presidential influence for personal financial gain, which could expose him to foreign influences while operating in a sector that lacks rigorous oversight. This situation intertwines Trump’s controversial business practices with an industry infamous for its fraud and opacity, potentially making this his most lucrative business venture to date.
Auctioning Influence
Trump’s transition from being a cryptocurrency skeptic to an active participant in the industry last year raised alarms among advocacy groups focused on ethics and transparency. There are fears that, if he were to return to political office, he might push for legislation favoring the crypto sector that would also benefit his personal investments. The method of offering direct access to the former president through a cryptocurrency initiative has heightened concerns regarding political corruption and influence-peddling, especially considering the contest’s lack of transparency, with the identities of the winners remaining undisclosed.
The contest rules specified that the top 220 purchasers of the $TRUMP token, displayed on a public leaderboard, would receive invitations to dine with Trump. The top 20 on this leaderboard would gain even more exclusive access at a VIP reception. However, the leaderboard only featured usernames and crypto wallet addresses, omitting any personal identifying details. Participants could also select any name to include on their invitation, adding further uncertainty regarding who might actually attend.
Concerns Over Foreign Influence
One major concern raised by Democrats and ethics organizations is that this contest could enable foreign investors to gain sway over Trump by investing in his cryptocurrency. Analyses of the $TRUMP leaderboard have suggested that a significant number of top purchasers utilized foreign exchanges that do not permit U.S. users, implying that many of the winners could be non-U.S. residents. The top buyer, who holds over $18 million in $TRUMP, has been linked to Justin Sun, a Hong Kong-based crypto entrepreneur who faced fraud charges from the Securities and Exchange Commission (SEC) in 2023, although that investigation has been paused since Trump took office. Sun is also known for investing heavily in various Trump family crypto ventures.
Beyond the contest, the $TRUMP coin has garnered interest from foreign investors. Recently, a tech firm named GD Culture Group, which operates a Chinese subsidiary and has a TikTok e-commerce division, announced it secured $300 million to purchase $TRUMP coins. This acquisition could coincide with Trump’s decisions regarding TikTok amid discussions of a potential ban or forced sale in the U.S.
The Trump Family’s New Direction
The Trump family’s entry into the cryptocurrency market is a relatively recent phenomenon. Since the beginning of last year, they have fully embraced the industry. During his presidential campaign, Trump actively sought crypto investors, becoming the first candidate to accept cryptocurrency donations and vowing to establish the U.S. as the “crypto capital of the world.” Later, he announced the launch of World Liberty Financial, a crypto venture that has reportedly raised around $550 million under the Trump family’s control.
Trump’s involvement in cryptocurrency deepened following his election win, as he engaged in creating memecoins that often experience wild fluctuations in value due to speculative trading. The $TRUMP cryptocurrency and a $MELANIA coin made their debut shortly before his inauguration, with the value of $TRUMP initially soaring to about $75 but then declining, only to rise again after Trump announced the exclusive dinner offer for top buyers.
Since that time, the Trump family’s crypto enterprises have expanded further, introducing another cryptocurrency named USD1, a vague “Trump reward points” program, and even an Exchange-Traded Fund (ETF). Recently, Eric Trump revealed that a Bitcoin mining venture controlled by the family plans to go public. The structure of these entities is complex; Trump does not directly own the company behind the $TRUMP memecoin, as it is held by the Trump Organization through associated LLCs that profit from the coin’s trade and control around 80% of its reserves, valued at over $2 billion at current market rates.
Shifting Regulatory Landscape
The Trump family’s rapid expansion into cryptocurrency coincides with efforts by the Trump administration to deregulate the sector, including the appointment of a pro-crypto SEC head. Last April, the Department of Justice disbanded its cryptocurrency fraud investigations unit, aligning with a pro-crypto executive order issued by Trump. These deregulation efforts are occurring in a landscape still riddled with scams, not long after the notorious failure of the FTX exchange, which resulted in one of the largest financial scandals in recent memory.
This potential relaxation of regulations has implications that extend beyond concerns of corruption and financial impact. The proliferation of Bitcoin mining operations across the U.S. has raised issues related to energy consumption, environmental damage, and noise pollution, all of which are under the purview of regulatory bodies that Trump can influence. Some Democratic lawmakers, as well as certain Republicans, have expressed their disapproval of Trump’s conflicts of interest, with Senator Richard Blumenthal initiating an ethics inquiry into the president’s cryptocurrency operations.
In a recent letter, Blumenthal stated, “President Trump’s financial ties to the $TRUMP coin, along with his attempts to use the White House to host competitions to enhance the coin’s value, represent an unprecedented pay-to-play scheme that offers access to the Presidency to those who can pay the highest price.” Additionally, Trump’s crypto initiatives have hindered the progress of the Genius Act, a bipartisan bill intended to regulate certain cryptocurrency aspects. Senate Democrats and a few Republicans opposed a procedural motion that would have allowed the bill to advance, arguing it required stronger safeguards against the conflicts of interest created by Trump.
Massachusetts Senator Elizabeth Warren has voiced her astonishment at Trump’s swift actions to leverage his presidential position for personal profit, stating, “The most significant corruption scandal in modern history is unfolding right now and no one seems to be paying attention.”
