‘Roadmap for corruption': Trump dive into cryptocurrency raises ethics alarm
Watchdog groups, congressional Democrats and some Republicans have levelled a firestorm of criticism at Trump for hawking his own memecoin $Trump, a novelty crypto token with no inherent value, by personally hosting a 22 May dinner at his Virginia golf club for the 220 largest buyers of $Trump and a private 'reception' for the 25 biggest buyers.
To attend the two events, the $Trump buyers spent about $148m, which will benefit Trump and partners, according to the crypto firm Inca Digital.
Further, the Trump family crypto venture World Liberty Financial that launched last fall, which his two oldest sons have promoted hard, was tapped this month to play a key part in a $2bn investment deal by an Abu Dhabi financial fund in the crypto exchange Binance which in 2023 pleaded guilty to US money laundering and other violations.
The new WLF deal was announced at an Abu Dhabi crypto conference that drew Eric Trump two weeks before Trump's mid-May visit to the United Arab Emirates capital, sparking other concerns of improper foreign influence and ethics issues.
Trump's ardent pursuit of crypto fortunes was highlighted in a report last month from the watchdog group State Democracy Defenders Fund that estimated his crypto ventures as of mid-March to be worth about $2.9bn. That is a striking sum since Trump's crypto ventures are less than a year old.
Senate Democrats led by Jeff Merkley of Oregon and the minority leader, Chuck Schumer of New York, introduced a bill this month that has garnered sizable Democratic backing to block Trump from using his office to benefit his crypto businesses.
Watchdogs say Trump is exploiting his office for personal gain in unprecedented and dangerous ways.
'There is the appearance if not the reality of corruption in the upcoming dinner with Trump on the 22nd at his Virginia golf club for the 220 biggest Trump meme coin buyers and the private reception he's promised for the top 25 buyers, plus the separate $2bn deal between World Liberty Financial and the Abu Dhabi investment vehicle,' said Richard Painter, a former White House ethics adviser to President George W Bush who co authored the Democracy Defenders Fund report.
Other experts are equally troubled by Trump's manifest conflicts.
'Trump is marketing access to himself as a way to profit his memecoin,' said the Columbia Law professor Richard Briffault, an expert on government ethics. Briffault added: 'People are paying to meet Trump and he's the regulator in chief. It's doubly corrupt. This is unprecedented. I don't think there's been anything like this in American history.'
Such concerns were fueled when Trump quickly chose crypto industry allies to run the Securities and Exchange Commission and as his 'czar' for crypto and AI. Among other moves, the SEC has dropped or put on hold investigations and prosecutions of over a dozen crypto firms.
Fears of possible corruption have also focused on Chinese born Justin Sun, the biggest investor in Trump's crypto ventures. Sun bought about $20m of $Trump to become its top purchaser before the dinner on the 22nd which he attended. Sun previously invested at least $75m in World Liberty Financial to become its lead investor and an adviser.
Sun may also be benefiting from the SEC's laxer oversight. Sun was sued by the SEC in 2023 for fraudulent market manipulation and other allegations of misconduct involving three other crypto enterprises of his, including the Tron Foundation.
As the SEC eased its crypto oversight, the agency earlier this year paused its case against Sun, sparking concerns that Trump's financial ties to Sun might have influenced the agency's decision, a matter that Senator Elizabeth Warren of Massachusetts and the Democratic congresswoman Maxine Waters of California raised in a letter to the SEC last month.
The SEC has reportedly been holding talks with Sun about settling the charges, and the agency's chairman told a congressional hearing on 20 May that he knew nothing about Sun's case.
Other warnings about Trump's crypto dealings have also been fueled by recent scandals that have plagued crypto businesses, many of which are known for their opaque operations and some illicit dealings including ones tied to North Korean hackers that helped fund the country's nuclear and military programs.
Crypto critics were dismayed at a justice department memo in April announcing the closure of a national cryptocurrency enforcement team that was established in 2022, which had brought some major crypto cases against North Korean hackers and other crypto criminals.
The memo stressed the justice department was not a 'digital assets regulator' and in a political twist lambasted the Biden administration for its 'reckless strategy of regulation by prosecution'. The memo noted that a January pro-crypto Trump executive order spurred its decision.
For their part, Trump, his family and White House press statements have dismissed concerns about conflicts of interest or ethical improprieties with Trump promoting his crypto business while in office.
The press secretary, Karoline Leavitt, told reporters before the dinner that Trump was attending it in his 'personal time' and it was not a White House event, but declined to release names of the attenders.
The Trump Organization in January said that the president's business interests including his assets and investments, would be placed in a trust that his children would manage and that Trump would not get involved in decision-making or daily operations. Trump's family also tapped a lawyer to serve as an ethics adviser.
Those pledges have been overshadowed by Trump's enthusiasm for his digital currencies. In a harbinger of Trump's two crypto events on the 22nd, in March he hosted the first-ever White House 'crypto summit', for a couple of dozen industry leaders where he pledged to end the Biden administration's 'war on crypto'.
'Trump's crypto schemes are profoundly corrupt,' Merkley told the Guardian 'He's selling access to his administration and enriching himself in the process.'
In response, Merkley and Schumer introduced the End Crypto Corruption Act, which 20 other Democrats have endorsed.
Merkley stressed that the bill would 'not only crack down on this corruption but also prevent other officials – like members of Congress and Trump's billionaire sidekick Elon Musk – from betraying public trust'.
Merkley's warnings have been echoed by several watchdogs.
'Trump's dealings in crypto appear to present the greatest conflicts of interest and avenues for corruption any president has ever embraced,' said Larry Noble, a former general counsel at the Federal Election Commission who now teaches law at American University.
Noble's alarms are underscored by the large number of foreign buyers who appear to have scooped up Trump's memecoin to win coveted spots at his dinner.
While the identities of most $Trump purchasers are unknown, several reports from crypto analysts who track the industry suggest that a large number of foreign buyers have ponied up tens of millions of dollars to buy $Trump coins and attend the dinner.
One analysis by Bloomberg has indicated that 19 of the top 25 crypto wallets are almost definitely owned by individuals who operate outside the US.
Sun, who bought $4.5m of his almost $20m in $Trump coins after Trump announced the events on the 22nd, showed his appreciation by posting on X on 19 May: 'Honored to support @POTUS and grateful for the invitation from @GetTrumpMemes to attend President Trump's Gala Dinner as his TOP fan!'
Besides Sun, the second biggest buyer is reportedly MemeCore, a Singapore-based crypto network that was vocal about its interest in attending the Trump dinner and invested $18m.
Trump's avid embrace of crypto became palpable last summer at a bitcoin conference where he pledged to make the US the 'crypto capital of the world', a marked shift from 2021 when he dismissed bitcoin as a 'scam'. The change helped his campaign pull in millions of dollars in crypto industry donations.
Last fall, Trump and his two older sons, Eric and Don Jr, announced on the multibillionaire Elon Musk's X that they were launching World Liberty Financial.
Trump on X boasted opaquely that 'crypto is one of those things we have to do. Whether we like it or not, I have to do it.' A white paper for the new business dubbed Trump 'its chief crypto advocate', and his sons have promoted it aggressively and helped to lure new investments.
Reuters reported in late March, that World Liberty Financial had raised over $500m in recent months. Trump's family now controls the bulk of its business and Reuters revealed that it is entitled to about $400m in fees and 75% of revenues from WLF's token sales.
The recent $2bn investment deal that WLF will be part of with the Abu Dhabi fund and Binance is the latest big financial coup for Trump and his sons, but one that's raised some red flags given legal problems that have previously beset Binance.
The Abu Dhabi fund MGX , which has backing from the UAE government, according to reports is slated to use a stablecoin product that WLF is now marketing to help complete its $2bn investment deal in Binance. A stablecoin is a cryptocurrency pegged to a traditional currency, or a more stable asset such as the dollar.
The WLF stablecoin, dubbed USD1, will be used by MGX to invest in Binance, the world's largest cryptocurrency exchange that operates in dozens of countries; on 22 May Binance also announced that it would list WLF's USD1 for trading.
Previous legal problems for Binance may attract new attention, say critics including congressional Democrats. Binance's ex-CEO and founder, Changpeng Zhao, in late 2023 pleaded guilty in the US to violating the Bank Secrecy Act and failing to maintain an effective anti-money-laundering program at Binance, which also copped a guilty plea to criminal charges and paid over $4bn in fines.
Zhao, who served a four-month prison term last year and still owns 90% of the firm, revealed on a podcast on 5 May that he was seeking a pardon from the Trump administration, which several senators raised questions about in a 15 May letter to top justice department officials.
Before WLF's role with the Abu Dhabi fund's investment in Binance and to grow its crypto empire, WLF unveiled its first stablecoin in March, as a stablecoin Senate bill – dubbed 'the Genius Act', which critics say eases regulatory controls too much – moved closer to passing.
Watchdog groups and some Democrats including Warren have warned that the Senate bill's regulations are too lax to prevent fraudulent uses, as new studies have noted that these coins and other digital assets are increasingly being used for money laundering by Chinese exporters and producers of fentanyl and other synthetic drugs.
Republicans in Congress have been largely silent about Trump and his family capitalizing on their crypto ventures to enrich themselves. But the Wyoming Republican senator Cynthia Lummis, a lead sponsor of the Genius Act, which on 19 May notched a key vote towards Senate passage and would also benefit WLF's stablecoin, has said the upcoming $Trump events have given her 'pause'.
Some former Republican members are livid about Trump's crypto dealings.
'Trump has taken corruption and self-dealing to a new level,' said the ex-Republican congressman Dave Trott of Michigan. 'He seems singularly motivated to deregulate the crypto industry for the financial benefit of himself and his family, and few Republicans are calling him out.'
Trott said he was weighing a run for Congress in 2026 as an independent or a Democrat. 'I wish I was still in Congress so I could vote to impeach the guy,' he added, referring to Trump.
Further, leading House Democrats say Trump's presidency is benefiting his burgeoning crypto business in dangerous ways.
'Trump's personal and family net worth has gone up by billions of dollars this year due to crypto ventures,' said the Democratic representative Jamie Raskin from Maryland. Raskin warned that Trump's crypto ventures offered the 'perfect opportunity for foreign government, corporate and individual funds to be funneled into Donald Trump's bank account and his family's finances'.
Likewise, Noble foresees national security and other dangers with Trump and his family's fast-growing crypto businesses.
'World Liberty Financial and $Trump appear to allow foreign governments, corporate interests and wealthy private donors who want something from Trump to secretly add to his wealth. This is a roadmap for corruption. What they want in return for their investments may present real dangers to our economy and national security.'
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