TheChek News Flow

Breaking Down Trump’s Entanglements With Crypto

Sector has been one of the biggest winners in the president’s second term

Key Points

• President Trump’s embrace of crypto is boosting the sector, raising ethical concerns related to his business interests and family involvement.
• Representatives of Trump’s family have held discussions about investing in the U.S. arm of the crypto exchange Binance.
• Trump’s sons—Donald Jr., Eric and Barron—are involved in World Liberty Financial, a business launched in September.

President Trump and his family’s embrace of cryptocurrencies have made the sector one of the biggest winners in his second term. Critics have raised ethical concerns given Trump’s vast business interests.

Here’s what to know about his crypto moves:

Trump is hosting a dinner Thursday for holders of his memecoin, $TRUMP. Memecoins are cryptocurrencies whose value is largely based on the popularity of internet memes. First lady Melania Trump’s $MELANIA coin made its debut in January at about the same time as her husband’s.

The coins initially surged in value, but have since tumbled. At one point, $TRUMP had a market value of some $15 billion.

Prices bounced back a bit in late April after Trump announced the coming dinner with the top 220 holders of his memecoin, many of whom are foreigners. Watchdog groups say he is directly benefiting from his office or could trade favors. Administration officials say there are no conflicts of interest.

Representatives of Trump’s family have held discussions about investing in the U.S. arm of the crypto exchange Binance. That would put the president in business with a firm that pleaded guilty to violating anti-money-laundering laws.

Binance executives also met with Treasury Department officials and discussed loosening U.S. government oversight on the company.

The Binance founder and majority owner, Changpeng Zhao, widely known as CZ, recently said his lawyers had formally applied for a pardon. He served four months in prison last year for a related charge.

The Trumps also have World Liberty Financial, a business they launched in September. Trump’s sons—Donald Jr., Eric and Barron—are all involved in the effort, and the family controls about 60% of the equity.

World Liberty Financial recently launched a stablecoin, which is a popular type of cryptocurrency that pegs its value to a fiat currency, such as the U.S. dollar. The firm got a big boost from a $2 billion deal in which a state-backed United Arab Emirates investor will put money into Binance using the World Liberty stablecoin. The project initially struggled to find buyers for the tokens it was selling, but then gained popularity around Inauguration Day.

The Chinese-born crypto executive Justin Sun spurred the momentum by investing $75 million in the project. In February, the Securities and Exchange Commission asked a court to pause a lawsuit accusing Sun and his companies of fraud. A spokesperson previously said Sun’s investments aren’t politically motivated.

Don Jr. and Eric have invested in a bitcoin-mining firm called American Bitcoin, which is aiming to go public through a merger with another bitcoin miner. Mining entails solving complex equations using computer servers to unlock bitcoin, the most popular digital asset.

Trump’s team is trying to shepherd two crypto bills through Congress in the coming months: one creating the first regulations for stablecoins, and another dictating which crypto products are regulated as securities by the SEC and which are regulated as commodities by the Commodity Futures Trading Commission.

The Senate is expected to vote on its version of the stablecoin bill soon. Some Democrats have cited Trump’s potential conflicts of interest and stablecoin activity as reasons they oppose the legislation.

Trump made one of his biggest crypto policy moves in March, when he established a national digital-asset stockpile similar to the U.S. gold reserve, giving the sector a stamp of approval. The stockpile will consist of bitcoin and other cryptocurrencies seized by law enforcement.

The Treasury and Commerce departments could make additional purchases of bitcoin as long as they didn’t cost taxpayers money, according to the executive order creating the crypto reserve. The government won’t buy other tokens in the stockpile.