In this sense, claims Jacob Silverman, coauthor of Easy Money: Cryptocurrency, Casino Capitalism, and the Golden Age of Fraud, the TRUMP coin setup seems to have some characteristics of the “classic memecoin pump-and-dump”-a maneuver. issuers keep a large amount of coins, promote the project, then issue their holdings, devaluing the coins and giving huge losses to others. investors. “If you have an insider distribution of 80 percent, the risk that it will be thrown out in public or there is some kind of major sell-off is just massive. It’s a huge red flag,” Silverman alleges. “Unfortunately, some poor saps will be soaked.” (Pump-and- dumps occupy a legal gray area, legal experts say, but ethically condemned.) Melania Trump’s decision to release memecoin itself seems to have affected TRUMP’s investors, not even the potential ones pump-and-dump. After the MELANIA coin went live, the TRUMP token collapsed in price by 50 percent. A litany of unofficial Trump-inspired memecoins—including MAGA, MAGA Hat, and Super Trump—have also collapsed. During the 2024 election cycle, political memecoins used as a proxy to bet on election results and express support for certain candidates, up and down with events on the campaign trail. But TRUMP’s launch inadvertently undermined the opinion of unofficial coin buyers as a sign of support for Trump. “I don’t think this is appropriate for the president of the United States,” said Steven Steele, director of marketing for MAGA tokens, in a video sent to X. “This seems like an egregious money-grab.” Silverman claims. By investing large sums of money into cryptocurrencies in which Trump has a large financial interest, so the value rises, politically motivated actors can elect the president without any direct transactions, he said. “It’s a kind of channel for influence and influence of a kind that hasn’t been seen before,” Silverman said. Although in his first term Trump dismissed bitcoin as a “scam,” he did a complete volte-face in the leadup to the 2024 presidential election. As crypto industry figures endorsed the presidency and spent hundreds of millions of dollars in donations on pro-crypto super political action committees, Trump began to raise himself as the “crypto president.” In July, speaking to thousands of bitcoiners at a conference in Nashville, Tennessee, Trump promised to turn the US into the “crypto capital of the planet” and create a national “bitcoin stockpile” if re-elected. Then in September, the Trump family helped launch a new crypto business, World Liberty Financial, which they created as a way to “make finance good again.” (It remains unclear what services World Liberty Financial will provide.)World Liberty Financial was met with skepticism by some members of the crypto industry, who are worried that the project could lead to losses among investors and deal lasting reputational damage if it fails. The same logic applies to the TRUMP memecoin. “If this totally blows up in many people’s faces, it will be super bad, because the media attention will be negative,” said Bendiksen. But for all the potential consequences, there is little to prevent Trump from testing the boundaries of what is acceptable with crypto, said Silverman, as others have done before him. Especially as he prepares for an overhaul of the SEC, the financial regulator most eager to pursue the crypto industry in the previous administration. “In some ways, he’s just another crypto entrepreneur,” Silverman said. “He’s just the president.”
