Senator Elizabeth Warren and Representative Jake Auchincloss have called on U.S. regulators to investigate the TRUMP and MELANIA meme coins, raising concerns about potential ethics violations and risks of foreign influence. In a letter to the SEC, CFTC, Treasury, and the Office of Government Ethics, the lawmakers highlighted the dangers associated with these politically-affiliated tokens, which have drawn significant public and investor attention.
The tokens were launched just before President Trump’s inauguration on January 18, with the TRUMP coin reaching a $10 billion market cap within 24 hours. However, it has since lost over 50% of its value, dropping from $73 to $34, while the MELANIA token experienced an even sharper decline, plummeting 80% from $13 to $2.56. Despite disclaimers asserting that the tokens are not investments, Warren and Auchincloss questioned whether these statements exempt them from federal securities laws.
The lawmakers expressed alarm over the tokens’ potential to allow secretive foreign buyers to gain influence over the U.S. administration. They also cited reports that 80% of TRUMP tokens are held by Trump-affiliated entities, suggesting the possibility of market manipulation. The rapid enrichment of the Trump family, whose combined net worth reportedly soared to $58 billion following the tokens’ launch, has further fueled scrutiny.
As federal agencies review the situation, questions about the tokens’ legitimacy, investor protections, and the implications for U.S. financial ethics remain unanswered. The unfolding investigation could set a precedent for the regulation of politically-affiliated cryptocurrencies in the future.
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