Trump’s Crypto Token Sparks Conflict-of-Interest Concerns
Shortly before his inauguration on Monday, US President Donald Trump launched a crypto token, drawing sharp criticism from ethics experts and industry insiders. The launch of the $TRUMP and $MELANIA tokens has sparked concerns about potential conflicts of interest and a lack of transparency in an already loosely regulated industry.
Ethics Concerns Over Trump-Linked Crypto Tokens
Although Trump has pledged to hand over asset management to his children, his involvement in cryptocurrency raises red flags. Critics argue the tokens could create undue influence as the administration will regulate the crypto sector while Trump-linked businesses hold significant stakes.
CIC Digital LLC and Fight Fight Fight LLC, both affiliated with Trump’s business empire, collectively own 80% of the tokens. Over the weekend, this stake translated into approximately $8 billion in crypto value, leading to heightened scrutiny.
Danielle Brian, head of the watchdog group Project On Government Oversight, called the move a “blatant financial conflict of interest.” She also expressed concern over national security, noting the potential for foreign actors to exploit the crypto assets.
Reactions from Experts and Lawmakers
Prominent crypto investor Nic Carter criticised the tokens on social media, warning they could enable foreign buyers, even those under US sanctions, to curry favour with Trump. Democratic lawmakers echoed similar concerns, with Maxine Waters of the US House Financial Services Committee highlighting the risks of unregulated platforms facilitating trade in $TRUMP.
Meanwhile, supporters of the tokens dismissed these criticisms. The companies behind the coins describe them as “fungible crypto assets” and “expressions of support,” avoiding the term cryptocurrency. University of Sussex finance professor Carol Alexander likened the tokens to fan coins, suggesting they act as barometers of public support.
Industry Impact and Market Reactions
Trump’s foray into crypto has divided opinions within the industry. While some see it as a conflict of interest, others view it as a milestone legitimising cryptocurrency. Paul Howard, senior director at market-maker Wincent, hailed it as a “game-changer” for the sector, arguing that a president’s involvement could accelerate its growth.
Crypto markets reacted positively to the news, with Bitcoin hitting an all-time high on Monday amid optimism over Trump’s crypto-friendly policies. However, questions remain about the ethical and regulatory implications of a sitting president profiting from a volatile and unregulated market.
With inputs from Reuters.
