Before taking office, Jimmy Carter famously put his family-owned peanut business into a blind trust to ensure he would not have any conflicts of interest while serving as U.S. president. His successors followed suit, from George H.W. Bush to Barack Obama, before Donald Trump's vast business network raised alarm bells during his first term. Now, Trump's decision to launch a crypto memecoin three days before his inauguration is "on a level that I think no one imagined before," said Jordan Libowitz, a vice president at the watchdog Citizens for Responsibility and Ethics in Washington.
Unlike Trump's last term, when ethics organizations like CREW argued that domestic and foreign officials could buy leverage through bookings at Trump's hotels, his decision to launch a cryptocurrency—along with his new ownership holding in the publicly traded social media platform Truth Social—may create a new frontier for influence peddling.
While the U.S. Constitution and federal laws limit the use of money or favors to buy political favors, it is unclear how much—if at all—they might apply to the novel scenario of Trump's new memecoin.
Memecoin surprise
On Friday, Trump shocked even the crypto industry, whose leaders were assembled at a black-tie gala just blocks from the White House, by launching a so-called memecoin, or a cryptocurrency that doesn't claim any underlying purpose. Typically, such projects are tied to in-jokes or memes, like Dogecoin and the disastrous Hawk Tuah token, but Trump's memecoin appeared designed to coincide with a significant real-world event—his return to the presidency. The cryptocurrency soared in value, briefly reaching a market cap of nearly $15 billion, before falling to around $9 billion at the time of publication.
According to the project's website, Trump-linked companies own 80% of the token's supply, whose total value reached a peak of $70 billion, though the tokens will be released over the course of three years, according to the project's website. On Sunday, Melania Trump announced the launch of her own memecoin, though the accompanying website did not specify who is behind the project.
The new memecoins can be purchased by anyone on exchanges around the world and, while some may buy them for speculation or to express fandom, others may view acquiring them as a way to seek attention or approval from Trump.
The launch of the coins also comes at a time when the nature of Trump's personal wealth has changed. Unlike his first term, much of Trump's fortune now comes from his multi-billion-dollar ownership stake in Truth Social as well as his crypto projects, which include the crypto lending protocol World Liberty Financial. The projects have already garnered foreign interest, including the controversial crypto entrepreneur Justin Sun investing $30 million in World Liberty Financial and joining as an adviser.
The various projects could serve as an easier avenue for investment than Trump's hotels, and there is a possibility that other members of his family could launch memecoins of their own.
The launches immediately drew rebukes from ethics experts, who noted Trump's ownership stake, as well as criticism from leaders of the crypto industry, who argued it would detract from the sector's legitimacy. Ryan Selkis, the founder of the analytics platform Messari and an outspoken Trump supporter, posted on X that Trump should "fire" whoever advised the Melania launch.
A spokesperson for Trump did not respond to a request for comment.
Few legal constraints
While Congress passed conflict of interest laws in the early 1970s in the wake of the Watergate scandal, they excluded the president, meaning Trump's actions are unlikely to face any legal repercussions. Instead, past presidents have avoided such ventures as a matter of precedent, Libowitz told Fortune. "We're so used to these norms of presidents going out of their way," he said.
During his first term, Trump faced lawsuits, including by CREW, over a clause of the U.S. Constitution that forbids politicians from receiving presents—"emoluments" in legal speak—from domestic and foreign governments, though the Supreme Court dismissed the cases after Trump left office. But Trump's recent ventures, including the memecoin and his holdings in the social media platform Truth Social, set a new precedent, even if they do not violate the law. "There's a lot of things that fall into the area of completely unethical. But also probably totally legal," said Libowitz.
Could Trump's memecoin revive debates around the Constitution's emolument clause? With the launch just a few days old, it is still unclear how—or if—foreign governments would buy into the token. The previous allegations around Trump surrounded the use of his hotels, with organizations like CREW arguing that state officials could use bookings as a way to curry favor.
Libowitz said that CREW is exploring new lawsuits, though it is uncertain whether purchases of the memecoin or Trump's other assets would violate the clause. "There isn’t a lot of precedents for the president to be the owner of a publicly traded asset, and especially a meme asset," he told Fortune.
Those who fear crypto could be a new conduit for Trump influence-seeking may take some comfort in the fact the TRUMP and MELANIA coins are hosted on a blockchain, which produces a public, visible record of all transactions. This means that large and unexpected purchases of the coins could signal an attempt to buy influence—though the identity of a given buyer may not always be apparent since blockchain technology also makes it possible to obfuscate purchases by using multiple, or anonymous, wallets.
