Federal Agencies Asked to Investigate Trump Family Meme Coins

TLDR

• Trump and Melania launched meme coins on Solana blockchain just before inauguration, with Trump Organization holding 80% of $TRUMP tokens
• The coins’ rapid price increase pushed Trump family net worth to $58 billion, with $TRUMP reaching market cap of $7 billion
• Sen. Elizabeth Warren and Rep. Jake Auchincloss sent letter to federal agencies requesting investigation of potential ethics violations and regulatory concerns
• Trump attempted to distance himself from the coin, causing price volatility
• Concerns raised about foreign influence potential and risks of a future “rug pull” after three-year lock period

The Trump family’s entry into cryptocurrency markets through meme coins has sparked federal attention, with Democratic lawmakers calling for investigation into potential ethics concerns. The $TRUMP token, launched days before Donald Trump’s second presidential inauguration, has reached a market value of $7 billion.

The token’s launch occurred on the Solana blockchain, with the Trump Organization retaining control of 80% of the total supply. This ownership structure has raised questions about potential conflicts of interest, as the coin’s value directly impacts the Trump family’s wealth.

President Trump’s own comments about the project have led to market volatility. When asked about the coin at a tech executive meeting, Trump stated, “I don’t know much about it other than I launched it. I heard it was very successful. I haven’t checked.” These remarks caused the token price to drop 16% before recovering.

First Lady Melania Trump also launched her own meme coin, $MELANIA, which has achieved a market capitalization of $415 million. The combined success of both tokens has contributed to a sharp increase in the Trump family’s net worth, now estimated at $58 billion.

Senator Elizabeth Warren and Representative Jake Auchincloss have taken action by sending a letter to multiple federal agencies, including the Treasury Department, Securities and Exchange Commission, and Commodity Futures Trading Commission. The letter requests a review of potential ethical and regulatory violations.

The lawmakers expressed particular concern about the possibility of foreign influence through these digital assets. They noted that anyone, including leaders of hostile nations, could potentially purchase these tokens without detection.

Adding to the complexity of the situation, Trump now oversees the appointment of permanent heads to the same regulatory agencies that may need to make decisions about these tokens’ future.

The letter specifically questions what will happen after the three-year lock period expires. Warren and Auchincloss warned about the possibility of a “rug pull” scenario, where the majority token holders could sell their holdings, potentially causing severe losses for other investors.

Democratic representatives have joined in expressing concerns. Representative Gerry Connolly, the ranking Democrat on the House Oversight Committee, has called for an investigation, while also raising questions about connections to Tron blockchain founder Justin Sun.

The timing of the launches, just before Trump’s inauguration, has drawn particular scrutiny. The rapid price increase from $3 to approximately $37 per token has led to questions about market manipulation and investor protection.

> dropping TRUMP memecoin 2 days before becoming president is nasty work
> new SEC/DOJ guarantees no prosecution
> 80% of tokens vest to insiders DURING the presidency
> most ppl losing money will be MAGA who aren’t crypto native
> *should* be a crime but crime is legal now ig?

— Coffeezilla (@coffeebreak_YT) January 18, 2025

Further complications arose when Ivanka Trump publicly denounced an unauthorized meme coin using her name. Her legal team announced they would pursue action against the creators of this separate token.

The federal agencies have been given until February 4, 2025, to respond to several key questions about the tokens. These include inquiries about applicable ethics rules, trading activity monitoring, and regulatory authority over meme coins.

The lawmakers’ letter also criticized the broader meme coin sector, stating these tokens don’t provide meaningful benefits to the financial system through improved payment systems or lending capabilities.

Current trading data shows the $TRUMP token at $35.05, while the $MELANIA token trades at $2.77. Both coins continue to see active trading despite the controversy.

Regulatory agencies have not yet publicly responded to the letter or indicated whether they are conducting any reviews of the tokens.