Since its launch, the $TRUMP token has been at the center of controversy with unprecedented price volatility and moral dilemmas. Although a lucky few investors have reaped significant profits, the overwhelming majority of them have lost money. Now, Democrats want to dive deep on Trump’s role with the digital currency. What they are most worried about is the broad disparity and special interests’ conflict of interest.

A closer look at $TRUMP token holders shows this one heavily favors the house. Only 58 wallets have created more than $1.1 billion in value increases. Altogether, each of these wallets have seen more than $10 million profit made from their investment. In sharp contrast, of the roughly two million crypto wallets that bought $TRUMP, only about 764,000 were unprofitable. This makes it sound like a very small fraction — about just 0.0075% of $TRUMP holders — received irresistible financial gains. A new Bloomberg report uncovers one surprising detail: more than 50% of the largest holders of $TRUMP are probably foreign buyers. Indeed, 76% of the token’s value is held within just the top 220 wallets — potentially owned by these foreign actors.

Democrats' Scrutiny and Ethical Concerns

The financial dynamics of $TRUMP have triggered significant scrutiny from Democratic lawmakers, raising concerns about conflicts of interest and ethical breaches.

Congressional Actions and Demands for Transparency

Senators Merkley and Elizabeth Warren have sent a letter to the Office of Government Ethics, pushing for an urgent review of a reported deal involving World Liberty Financial, crypto exchange Binance, and a UAE state-backed fund called MGX. For starters, Warren has called for transparency around the OGE’s review of the ethics waiver issued for David Sacks. As a venture capitalist advising Trump on crypto policy, any financial interests that Sacks may still have in the crypto space could lead to a serious conflict of interest.

In response, some of these Democrats have gone above and beyond by sponsoring the End Crypto Corruption Act. This legislation would prevent the president, vice president, members of Congress, senior executive branch officials, and their immediate family members from endorsing or issuing cryptocurrencies. We are grateful to Representative Waters for introducing a thoughtful discussion draft. Its stated goal is to prohibit the president and members of Congress from owning or profiting from any crypto assets. These legislative efforts mirror a larger, bipartisan concern over the crypto space’s potential for corruption and bad actors to perpetuate undue influence.

Allegations of Conflict of Interest and Abuse of Power

Democrats are actively investigating Trump's crypto dealings, including the reported deal between World Liberty Financial and Binance, as well as the role of Trump's family in these ventures. The biggest issue is likely to be Trump’s deep connections to the $TRUMP token. Simultaneously, he’s been advocating for greater US involvement in the digital currency space, putting him at odds with himself.

Senator Jeff Merkley has described Trump's involvement in cryptocurrency as "a massive form of corruption we haven’t witnessed," echoing concerns that Trump is leveraging his position to profit from his memecoin and crypto company, World Liberty Financial. Allegations of influence peddling have surfaced, with claims that Trump's financial ties to the $TRUMP coin and attempts to use the White House to promote the token's value represent an unprecedented scheme to provide access to the Presidency to the highest bidder. Senator Blumenthal has characterized Trump's actions as "a selling of influence, a conflict of interest, just a massive form of corruption we haven’t witnessed."

Tokenomics and Market Dynamics

Familiarizing yourself with the tokenomics of $TRUMP can help you evaluate its potential risks and rewards.

Token Distribution and Unlocking Schedule

Based on the tokenomics of $TRUMP, creators and CIC Digital combined own 80% of the tokens. Unlike their companies, these tokens are subject to a three-year vesting schedule. 75% of the tokens are still under lock up. If the token is initially unlocked gradually, that would have a huge potential impact on the token’s price. At implant, we set aside 10% of the total tokens for liquidity. In addition, we allocated another 10% for public distribution— all of which were released at the token generation event (TGE). The other 80% will be released in stages over time.

Market Risks and Potential Rewards

Analysts such as Matthew Dibb of Astronaut Capital are already foreseeing the volatility, including sell-offs when initial excitement wears off. The coin’s structure has fueled accusations of a potential “pump-and-dump” scheme, where insiders hype the price before selling, leaving retail investors with losses. Meme coins are among the most volatile cryptocurrencies. Their prices can skyrocket or tank almost overnight, frequently due to the promotion of powerful celebrities or shifts in trader mood.

As with any cryptocurrency, investing in meme coins such as $TRUMP are fraught with risks. You can make some very fast gains with a very limited investment. Beware—its extreme volatility and exposure to market manipulation render it a speculative investment. Investors need to remain vigilant and do their own research before entering any cryptocurrency, let alone meme coins. Keep an eye out for high-loss, high-harm projects.

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