Trump’s Memecoin Scheme Raises Alarm Among Crypto Experts

WASHINGTON, D.C. — Just days before his inauguration, former President Donald Trump launched a cryptocurrency asset, dubbed the “Trump memecoin,” which briefly made him a billionaire on paper. The memecoin, which surged in value before plummeting, has drawn criticism from crypto experts and raised concerns about its potential impact on unsuspecting investors.

The Trump memecoin, created by Trump-affiliated organizations CIC Digital LLC and Fight Fight Fight LLC, saw its value skyrocket on the eve of his inauguration. However, the asset’s volatility and the fact that Trump and his associates own 80% of its supply have sparked fears of a potential financial scheme. “I wouldn’t call this a scam,” said Omid Malekan, an associate professor at Columbia Business School. “There’s no deception here. It’s all happening in plain sight.”

The memecoin’s website, featuring the slogan “Celebrate Our Win & Have Fun,” includes a schedule for releasing more “Trump Memes” and a lengthy terms of service document. Despite the transparency, critics argue that the project exploits Trump’s supporters, many of whom are new to the crypto world. “A lot of Trump supporters buying the memecoins are new to the crypto world,” Malekan added. “They might not understand the risks involved.”

Trump’s foray into cryptocurrency comes as his administration signals plans to roll back regulations on the industry, potentially exposing traditional banking systems to the volatility of crypto markets. Molly White, a crypto researcher, warned, “We’re looking at serious risk to the much broader financial ecosystem that is unprecedented for the crypto world.”

Meanwhile, other Trump-affiliated figures have launched their own memecoins, including First Lady Melania Trump and Pastor Lorenzo Sewell, whose $LORENZO coin lost value within a day. Memecoins, unlike established cryptocurrencies like Bitcoin, are often built on existing blockchains and serve more as speculative assets than functional currencies. “Memecoins are useless,” White said. “They are not an actual cryptocurrency.”

The Trump memecoin saga highlights the risks of unregulated crypto markets and the potential for exploitation in a rapidly evolving financial landscape. As the memecoin’s value continues to fluctuate, its long-term impact on both Trump’s supporters and the broader economy remains uncertain.