‘I have never seen such open corruption’: Trump’s crypto deals and loosening of rules shock observers

Unprecedented Conflicts? Inside Trump's Deep Dive into the Lucrative, Deregulated World of Crypto

From dismissing Bitcoin as a "scam" and warning of unregulated crypto facilitating "unlawful behavior," Donald Trump has made a dramatic pivot. Now, as president, he is actively embracing and profiting immensely from the cryptocurrency industry, leading many observers, ethics watchdogs, and even some former Republicans to cry foul over what they describe as unprecedented levels of open corruption and conflicts of interest.

At the heart of the controversy are Trump's burgeoning crypto ventures, launched since his return to office. One notable example is the $Trump memecoin, a speculative digital token based on online jokes with no inherent value. Trump and his partners have reportedly raked in tens of millions from this token. A specific event highlighting this was a private dinner and White House tour offered to top purchasers of the $Trump memecoin, which generated substantial sums, much of it from anonymous and foreign buyers.

Critics argue these activities constitute a blatant exploitation of the presidency for personal financial gain, precisely what the founders of the United States sought to prevent. Experts on authoritarian regimes and former federal prosecutors have voiced shock, describing the situation as "open corruption" and a "textbook example of what the framers wanted to avoid."

This pursuit of crypto riches runs parallel to significant shifts in regulatory policy under the Trump administration. Agencies like the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) have moved rapidly to loosen rules and alter enforcement strategies that targeted cryptocurrency ventures under the previous administration. The declared aim is to make the US the "crypto capital of the planet" and end the "war on crypto."

The impact of these deregulatory efforts is already being seen. Cases involving crypto companies charged with fraud have been paused or ended, and a dedicated DOJ national cryptocurrency enforcement team has been closed, citing a policy shift influenced by a pro-crypto executive order. The administration has also nixed warnings from the Department of Labor cautioning against including cryptocurrency in 401K retirement plans, a move experts say removes a "red light" for potentially risky investments for ordinary Americans.

These policy changes appear to directly benefit Trump's crypto ventures and his allies. For instance, cryptocurrency multibillionaire Justin Sun, who invested heavily in the $Trump memecoin and another Trump crypto enterprise, World Liberty Financial (WLF), has seen fraud cases against his companies paused by the SEC, which reportedly engaged in settlement talks.

Furthermore, WLF, in which Trump and his sons hold a majority stake, has entered into lucrative deals with overseas crypto firms, including a significant investment partnership involving the world's largest crypto exchange, Binance. This deal comes despite Binance having pleaded guilty in 2023 to violating US money-laundering laws and being fined $4 billion, with its former CEO serving a jail term.

These entanglements, especially those involving entities with recent legal issues and foreign ties, fuel concerns about foreign influence and potential risks to the financial system. Critics warn that easing oversight creates a "welcome mat of impunity" for potential fraudsters, potentially leading to increased investor losses. FBI data shows fraud related to crypto businesses surged, with Americans losing billions.

Despite the strong criticism from legal scholars, ethics watchdogs, and a bipartisan chorus of politicians concerned about unprecedented conflicts of interest, the Trump family has largely dismissed the concerns. They have stated that Trump's business interests were placed in a trust managed by his children, and that he would attend related events in his "personal time." However, critics argue these measures are insufficient given the president's active embrace and promotion of the industry that directly benefits his financial interests while simultaneously shaping its regulatory future.

Legislative efforts to address these concerns, such as proposed bills to ban federal officials, including the president, from profiting from crypto practices, highlight the perceived severity of the situation. As one Democratic senator put it, "Donald Trump has turned the presidency into a crypto cash machine," and his crypto ventures represent the "Mount Everest of corruption."

The pattern of using the presidential office and its influence to generate personal wealth through crypto, coupled with rapid deregulation of the same industry, raises fundamental questions about ethical governance and the potential risks posed by reduced oversight in a volatile and often opaque market.