Warren and Auchincloss raise concerns over Trump's meme coins

U.S. Senator Elizabeth Warren and Representative Jake Auchincloss have expressed concerns over the recent launch of meme coins $TRUMP and $MELANIA by President Trump and First Lady Melania Trump. They have reached out to the United States Office of Government Ethics, the Department of the Treasury, the Securities and Exchange Commission (SEC), and the Commodity Futures Trading Commission (CFTC) to address potential risks associated with these digital currencies.

President Trump introduced the $TRUMP coin on January 17th at a price below $10 per coin. The value surged to approximately $75 by Sunday before declining to $33.88 on Monday. Concurrently, First Lady Melania Trump launched her own meme coin, $MELANIA, which initially priced at $7 rose to $12 overnight but later dropped to $4. This rapid fluctuation in value significantly increased their net worth to an estimated $58 billion.

Richard Painter, former ethics lawyer for the George W. Bush Administration, commented on the potential dangers posed by those responsible for regulating financial instruments also investing in them. Norm Eisen, a former White House ethics adviser during the Obama Administration, described this situation as "the single worst conflict of interest in the modern history of the presidency." Even within the cryptocurrency industry, there are voices labeling these coins as "grifty" and a "mockery."

The terms for both coins reportedly prevent consumers from seeking relief for fraud-related claims or participating in class action lawsuits against their issuers. Furthermore, concerns arise about foreign buyers using these coins to gain influence over President Trump and his administration.

Warren and Auchincloss have raised questions regarding how agencies will handle ethical issues related to these meme coins' launch, track purchases, ensure current laws restrict foreign actors from buying them, and what powers SEC and CFTC possess to protect retail investors.