In this sense, claims Jacob Silverman, co-author of Easy Money: Cryptocurrency, Casino Capitalism, and the Golden Age of FraudThe TRUMP coin setup is a “classic memecoin pump-and-dump” — a maneuver in which an issuer holds a large amount of its coin, promotes the project, then cashes in their holdings, devaluing them. . causing huge losses to the coin and other investors. Dump on the public or that there will be some kind of big sale. That’s a huge red flag,” Silverman alleged. “Unfortunately, some bad juices are going to get soaked.” (Pump-and-dumps have a Legal gray arealegal experts say, but is roundly condemned as morally dubious.)
Melania Trump’s decision to launch her own memecoin has already given TRUMP investors a jolt, even absent any alleged potential pump-and-dump. After Melania coin goes live, Trump token 50 percent price drop.
A litany of unofficial Trump-inspired memecoins — among them Mega, maga hat, Doland Tramp And Super Trump-The value has also declined. During the 2024 election cycle, political memecoins will be used to a Proxy for betting on election results and expressing support for a particular candidate, rising and falling with events on the campaign trail. But TRUMP’s launch has unwittingly killed off seekers who bought unofficial coins as a sign of their support for Trump.
“I don’t think it’s appropriate for the president of the United States,” Mega Token marketing director Steven Steele said in one. video X has been posted. “It just seems like an enormous money grab.”
Perhaps more dangerous than financial loss to supporters, Trump MemeCoin could also serve as a new vector for bribery, Silverman claims. By investing large sums of money in a cryptocurrency in which Trump has a large financial interest, thereby driving up its value, politically motivated actors can curry favor with the president without any direct transaction. “These are the types of channels to leverage and leverage that we haven’t really seen before,” asserts Silverman.
The release of an official Trump memecoin marks the latest development in the president’s ongoing flirtation with crypto. Although in his first term, Trump rejected Bitcoin as “one”.scam” He performed a complete about-face in the lead-up to the 2024 presidential election. As the crypto industry figures supported his presidency And Hundreds of millions of dollars in donations On pro-crypto super political action committees, Trump has described himself as “crypto president“
In July, spoke with Thousands of Bitcoiners At a conference in Nashville, Tennessee, Trump promised to turn the US into the “crypto capital of the planet” and establish a national “.Bitcoin storage” if re-elected. Then in September, the Trump family helped launch a new crypto business, World Liberty Financial, which they pitched as a way to “make finance great again.” (It is unclear whether What services will World Liberty Financial provide.)
World Liberty Financial c Met with skepticism by some members of the crypto industry, who were concerned that the project could cause losses among investors and permanent reputational damage if it failed. The same logic applies to the TRUMP memecoin. “If it completely blows up in a lot of people’s faces, it will be very bad, because the media attention will be negative,” says Bendixen.
Yet for all the potential consequences, there is little to stop Trump from testing the limits of what is acceptable with crypto, Silverman says, as others have done before him. Especially as they The SEC prepares to reformThe financial regulator who The most passionately pursued crypto industry Under the previous administration.
“In some ways, he’s just another crypto entrepreneur,” Silverman says. “He just happens to be president.”
