Two hundred and twenty participants of a recent cryptocurrency competition received notification on Monday to expect an email containing “the most exclusive invitation in the world.” As a reward for their significant investments, some amounting to millions of dollars, these individuals won the opportunity to attend a private gala hosted by Donald Trump at his golf club in Washington, D.C. later this month.
This arrangement, which grants access to the former president in return for financial backing of his cryptocurrency project, highlights a significant conflict of interest in a political career marked by numerous such instances. Trump’s various financial connections, including real estate ventures, a media company, merchandise deals, and notable gifts such as a $400 million plane from Qatar, have raised alarms among government ethics watchdogs for many years.
Trump’s venture into the cryptocurrency realm exemplifies a new level of these conflicts, as it allows him to use his presidential influence for personal gain, raising concerns about potential foreign manipulation and involvement in an industry he has the power to deregulate. This situation intertwines Trump’s questionable business practices with an industry often criticized for its lack of oversight and prevalence of fraud, potentially making this his most profitable business endeavor to date.
Auctioning Presidential Influence
Trump’s transition from a cryptocurrency skeptic to an active participant in the industry last year alarmed advocates for ethics and transparency. There are worries that, if he were to regain office, he might push through pro-crypto legislation that would serve his financial interests. The auctioning of direct access to the president through this cryptocurrency initiative has heightened fears of political corruption and influence-peddling, especially given the contest’s lack of transparency. The identities of the winners remain undisclosed.
The contest’s guidelines specified that the top 220 purchasers of the $TRUMP coin, as displayed on a public leaderboard on the coin’s website, would earn an invitation to dine with the former president. The leading 20 participants would gain additional access through a VIP reception. However, the leaderboard only revealed usernames and crypto wallet addresses, obscuring the real identities of those involved. Winners were also permitted to register any name they chose on their invitations, further complicating the situation regarding actual attendees.
Concerns voiced by Democrats and ethics organizations center around the possibility of foreign entities gaining influence over Trump through investments in his cryptocurrency. An analysis of the $TRUMP leaderboard has indicated that a significant portion of leading buyers utilized foreign exchanges that restrict U.S. users, implying that some winners may be non-U.S. residents.
The wallet of the top $TRUMP buyer, who holds over $18 million worth of the coin, has connections to Hong Kong-based entrepreneur Justin Sun. In 2023, the Securities and Exchange Commission (SEC) charged Sun with fraud and other securities violations concerning cryptocurrency, although the SEC has since paused the investigation. Sun also invested heavily in the Trump family’s other crypto interests last year and serves as an advisor to World Liberty Financial, a company managed by Trump’s sons.
Beyond the contest, the $TRUMP coin has attracted other foreign investors. Recently, GD Culture Group, a small tech company with a subsidiary in China and an e-commerce business on TikTok, announced the acquisition of $300 million in funding to invest in $TRUMP coins. This timing coincides with Trump’s deliberation on how to handle the potential ban or forced sale of TikTok in the U.S.
The Trump Family’s Shift to Cryptocurrency
The Trump family’s entry into the cryptocurrency market is a relatively new phenomenon, but since early last year, they have immersed themselves in the sector. During his presidential campaign, Trump actively sought out crypto investors, becoming the first candidate to accept cryptocurrency donations. He promised to transform the U.S. into the “crypto capital of the planet” during a Bitcoin conference in July. Later that year, he introduced World Liberty Financial, a crypto venture controlled by the Trump family, which has raised around $550 million.
Following his election win, Trump’s involvement in the cryptocurrency space intensified, as he became engaged in the creation of so-called memecoins, which are known for their volatile trading patterns. The $TRUMP cryptocurrency, alongside a $MELANIA coin, was launched just days before his inauguration. Initially, the value of $TRUMP soared to approximately $75 per coin before experiencing a decline, though it began to rise again after Trump announced that top coin buyers would be rewarded with an exclusive dinner with him.
Since that announcement, crypto-related businesses linked to Trump have expanded, launching another cryptocurrency called USD1, a vague “Trump reward points” program, and an Exchange-Traded Fund (ETF). Recently, Eric Trump also declared that a Bitcoin mining company controlled by the family would go public. The structure of these ventures is complex, resembling a series of nested entities. Notably, Trump does not directly own the company that created the $TRUMP memecoin, as it is managed by CIC Digital LLC, a firm owned by the Trump Organization, which also holds 80% of the coin’s reserves, valued at over $2 billion based on current market prices.
This rapid development of the Trump family’s crypto empire marks a significant shift from Trump’s previous stance, where he labeled Bitcoin a “scam” in 2021 and called for stringent regulation. Given the substantial changes in the cryptocurrency landscape since then, it is worth noting that Trump now stands to gain financially from it.
Criticism of Trump’s Deregulatory Approach to Cryptocurrency
As the Trump family has expanded its cryptocurrency business, the Trump administration has simultaneously pursued deregulation of the industry, appointing a pro-crypto head of the SEC. In April, the Department of Justice disbanded its cryptocurrency fraud investigations unit to align with a pro-crypto executive order issued by Trump.
These steps toward deregulation come at a time when the cryptocurrency market continues to suffer from fraud, following the notorious FTX cryptocurrency exchange scandal led by Sam Bankman-Fried. The potential relaxation of regulations and endorsement of the crypto sector could have far-reaching implications, not only concerning corruption and financial stability but also regarding energy consumption from Bitcoin mining operations across the U.S., which contribute to supply issues, environmental hazards, and noise pollution.
Democratic lawmakers, along with some Republicans, have expressed their disapproval of Trump’s conflicts of interest, with some allies suggesting that the dinner invitation initiative may be excessive. Connecticut Senator Richard Blumenthal has initiated an ethics inquiry into the president’s cryptocurrency operations, articulating concerns that Trump’s financial connections to the $TRUMP coin and the use of the White House for competitions designed to enhance the coin’s value represent an unprecedented pay-to-play arrangement for access to the presidency.
Trump’s ventures into cryptocurrency have also contributed to the derailment of a significant bill intended to regulate certain cryptocurrency practices, known as the Genius Act, which initially enjoyed bipartisan support. Senate Democrats, alongside three Republicans, recently voted against a procedural motion that would have allowed the bill to advance, asserting the need for stronger safeguards to avert the types of conflicts Trump is fostering.
Massachusetts Senator Elizabeth Warren criticized Trump’s rapid maneuvers to leverage his presidential position for personal financial gain, labeling it as potentially the biggest corruption scandal in modern history, which she claims is largely overlooked by the public.
