are legal disputes coming for his memecoin?

According to the crypto lawyer Preston Byrne, lawsuits will come against Donald Trump due to the launch of his memecoin. 

Let it be clear, as of today it appears that no one has yet filed a complaint against the current president of the USA regarding the launch of his memecoin, but according to Byrne, this hypothesis should be considered inevitable. 

The accusations against Trump’s memecoin

The accusations directed at Trump’s memecoin are two. 

The first, very simply, is that it is a pump&dump scheme. 

It should be noted, however, how this kind of accusations are very frequent when a crypto experiences a bull at its debut, only to then, in a short period of time, end up falling well below the maximum price peak. 

The memecoin TRUMP was launched on the crypto markets last Friday when it was already evening in the USA.

The initial market price was about $7, but already the next day it had risen above $70, with a +900% in just over 24 hours. 

The peak was reached at $75, but the decline began as early as Sunday. When the launch of Trump’s wife’s memecoin, MELANIA, was announced, the price of TRUMP fell below $40, and the next day it also fell below $35.

Although compared to the initial $7, the current price is still significantly in profit, according to crypto researcher NingNing, almost two-thirds of the addresses that have purchased the TRUMP token have lost money. 

The possible pump&dump of the memecoin TRUMP

The fact is that certainly whoever launched this memecoin on the crypto markets has profited, at least for now. 

Furthermore, it was Donald Trump himself who advertised it. 

The hypothesis that the objective behind this initiative was to profit by “pumping” the price (even indirectly through advertising) seems rather obvious, just as the hypothesis that those who launched it in this way on the markets knew very well that the pump would be followed by a dump. 

However, it should also be added that the current price will certainly not be the final one, and nothing can completely rule out that it may recover sooner or later. Although there is no certainty that those who bought it can profit from it, unless they have already sold it or bought it at very low prices, it cannot be completely ruled out that in the future it may return to its highs. 

In these cases, however, the pump&dump is evident, but it is not certain that there are grounds for a denuncia. 

The exploitation of popularity

The second accusation against Trump is that he is exploiting his popularity at the expense of his followers. 

The United States Constitution explicitly prohibits sitting presidents from exploiting their popularity to earn money, but the memecoin was launched almost three days before Trump’s inauguration at the White House. 

However, it has been known since November 6 that Donald Trump would be inaugurated as president of the USA on January 20, and this means that, in light of what has happened, the accusations of having exploited his popularity have still been made. 

The tesi di Byrne

Preston Byrne has published a long post on his official blog where he explains his theses on the matter.

Note that Byrne defines “il nostro settore” as the crypto one, thus clearly indicating which side he is on, and that he provides legal advice to an important company in the crypto sector like Arkham. 

According to Byrne, the application of U.S. federal laws is probably not an issue in this case. Furthermore, even the SEC’s practice should not be a bull.

To this must be added that Trump has in fact promised new regulation for crypto, so the overall picture still seems quite positive for him. 

However, Byrne argues that the president might still not necessarily be shielded from legal issues, even with a low probability of ending up in court. In fact, he believes that there are other ways for a possible legal attack against him, and that the Democrats and other hostile parties might want to try.

Imagine, for example, that private disputes can be initiated, particularly by token holders. In fact, Byrne even argues that there is a 100% probability that some type of civil lawsuits will be initiated against Trump within the next 60 days.

Furthermore, in States with very strict laws for the protection of holders of securities and commodities, such as the State of New York, there could be enforcement actions, especially if they are led by democrats. 

Byrne indeed argues that the Trump memecoin project has paved the way for a large number of attack vectors, which the Democrats will seek to exploit.