Trump's crypto venture divides the industry he aims to support

Dressed in ballgowns, tuxedos and "Make Bitcoin Great Again" baseball caps, a crowd of cryptocurrency executives gathered a few blocks from the White House for a lavish party three days before President Donald Trump's inauguration, toasting an incoming administration that had vowed to promote the industry's interests.

But the crypto millionaires and billionaires were caught off guard by what happened next.

At 9 p.m. Jan. 17, with the festivities in full swing, Trump announced on social media that he was launching a a so-called memecoin known simply as $Trump.


The surprise disclosure raised fresh ethical and legal concerns about the ways that Trump continues to cash in on his power and fame, and it set off a wave of criticism from inside the industry that he says he wants to champion.

His venture, crypto executives said, created a brief and highly publicized bubble that partly deflated within a few days as Trump's family and its business partners collected millions of dollars from fees on purchases and sales of the coin.

"It makes it all look corrupt and self-interested," said Nic Carter, a vocal supporter of Trump who runs the crypto investment firm Castle Island Ventures and was at the Crypto Ball as the new $Trump coin was announced.

Many of the people who attended the Crypto Ball were unable to buy the coin early enough to profit because they were out partying rather than online.

Then, Sunday afternoon, a post appeared on Melania Trump's X account: She was launching a memecoin of her own, essentially creating a competitor. The price of $Trump plummeted by 60% over the next day.

Suddenly the industry's enthusiasm for Trump turned to fury.

Justin Bons, a crypto executive, said the back-to-back memecoin announcements were "nothing more than blatant money grabs."

Democrats in Congress, including Sen. Elizabeth Warren of Massachusetts, have written a letter to federal regulators asking them to investigate the matter.

But opening such an inquiry now would effectively require the SEC to investigate the family of a president who just nominated the agency's chair -- an experienced securities lawyer with close ties to the crypto industry.

This article originally appeared in The New York Times.