Crypto Insiders Lead Criticism Of TRUMP Coin Amid Controversy

The US President’s TRUMP meme coin has more critics than supporters in the crypto industry, as concerns over ethics and utility spark debates.

The TRUMP coins have been one of the most surprising and controversial token launches in crypto history. For a US President to launch his own cryptocurrency — a meme coin in particular — was unimaginable.

But it happened. The TRUMP meme coin, launched on January 17, almost exploded overnight. It surged to $13billion in market cap in just two days. Earlier this week, TRUMP was the third largest meme coin and among the top 15 cryptocurrencies.

That means it outperformed utility-driven assets like Polkadot, HBAR, and TON in just days. More surprisingly, the First Lady also launched the MELANIA meme coin.

While these tokens have created overnight fortunes for some, they have also drawn widespread criticism from crypto experts and political commentators.

Conflict of interest concerns raise red flags

Concerns over potential conflicts of interest dominate discussions. Critics, including U.S. lawmakers, warn that the token’s existence could allow individuals or entities to influence the president.

Former White House communications director and crypto advocate Anthony Scaramucci expressed his concerns on social media. He pointed out the risks of enabling global actors to easily funnel money into the president’s sphere of influence. “Every favor – geopolitical, corporate or personal – is now on sale, right out in the open,” he warned.

Crypto industry figures have been equally vocal. Gabor Gurbacs, founder of digital asset firm Pointsville, criticized Trump’s advisors, calling for a complete overhaul. For most in the crypto industry, Trump’s meme coin potentially threatens to destroy years of efforts that the industry made to develop utility-driven projects.

Nic Carter, a crypto investor and Trump supporter, labeled the move “preposterous”, arguing that it damages the credibility of the industry.

Concerns about the token’s distribution add to the controversy. Data shows that 80% of TRUMP tokens are held in a handful of blockchain addresses linked to CNC Digital, the firm behind the coin’s launch. Such concentration raises suspicions of a potential pump-and-dump scheme, where insiders profit at the expense of other investors.

The MELANIA meme coin has sparked similar issues. Nearly 89% of MELANIA tokens are controlled by insiders, contradicting claims on the token’s website that 35% would go to the public.

Lawmakers demand federal investigation

Ethereum co-founder Vitalik Buterin weighed in on the broader implications of these coins. He pointed to the risks of political memecoins, describing TRUMP as a turning point for the industry.

Buterin revealed that scammers had already exploited the hype surrounding TRUMP and MELANIA, stealing close to $1billion.

Criticism has also extended beyond the crypto industry. US law prohibits presidents from engaging in private business while in office, raising concerns about the propriety of Trump’s involvement.

Senator Elizabeth Warren and Representative Jake Auchincloss called for a federal investigation in a letter to regulators. They highlighted risks to consumers, potential conflicts of interest, and national security concerns tied to these tokens.

“The Trump family-controlled Trump Organization and its affiliates hold 80% of the TRUMP coin, leaving the remaining 20% of investors to bear the cost of coin’s price volatility,” the lawmakers wrote.

Overall, the launch of TRUMP and MELANIA tokens has ignited a debate about the ethics of political figures entering the cryptocurrency market. Where do we go from here? Unfortunately no one knows.

The main argument is that if the most powerful global leader can launch his meme coin, what’s stopping other celebrities and popular figures from doing the same? And who is ultimately benefiting from these projects?