Donald and Melania Trump launch a pair of meme coins ahead of inauguration, raising serious ethics concerns

The $TRUMP logo is seen on a smartphone on Jan. 19, 2024. Mateusz Slodkowski/SOPA Images/Shutterstock via CNN Newsource

The incoming first couple have launched a pair of meme coins in the leadup to president-elect Donald Trump’s inauguration that are already worth billions of dollars on paper. But the timing of the Trump cryptocurrency launch, just days before taking office and promising to be a crypto-friendly president, alarmed ethics experts and even some in the crypto industry.

Melania Trump launched her cryptocurrency $MELANIA in a social media post Sunday, sending her husband’s cryptocurrency $TRUMP, announced two days earlier, plummeting.

“The Official Melania Meme is live! You can buy $MELANIA now. https://melaniameme.com,” the future first lady wrote on X Sunday.”

Meme coins are a type of highly volatile cryptocurrency inspired by popular internet or cultural trends. They carry no intrinsic value but can soar, or plummet, in price.

“My NEW Official Trump Meme is HERE!” Trump wrote on X Friday. “It’s time to celebrate everything we stand for: WINNING! Join my very special Trump Community. GET YOUR $TRUMP NOW. Go to http://gettrumpmemes.com — Have Fun!”

Both coins are trading on the Solana blockchain. Trump’s meme coin skyrocketed over the weekend and was trading at more than $70 by Sunday afternoon, according to CoinGecko.

However, the president-elect’s coin nosedived to $40 after Melania revealed her own coin. It has since recovered some of those losses and was trading around $60 early Monday. $MELANIA was trading just over $12 early Monday, according to CoinGecko.

$TRUMP is the first cryptocurrency endorsed by the incoming president, who once trashed bitcoin as “based on thin air.”

Trump received strong support from the crypto industry this election after he embraced crypto and promised to America the “crypto capital of the planet.”

In July 2024, Trump addressed crypto’s largest convention and has since appointed Howard Lutnick, who supports the cryptocurrency company Tether, to run the US Commerce Department. Lutnick is among other crypto enthusiasts appointed to Trump’s next administration.

Ethics concerns

Now, Trump will not only preside over how the federal government will regulate crypto, he can personally cash in on the outcome.

“I believe it is very dangerous to have the people who are supposed to oversee regulating financial instruments investing in them at the same time,” Richard Painter, a law professor at the University of Minnesota, told CNN. “There’s no precedent for a head of state to launch a personal cryptocurrency.”

Painter, the top ethics lawyer in the George W. Bush Administration, said the launch of the meme coins just hours before inauguration raises “serious ethical questions about conflicts of interest.”

“The coin’s value could be influenced by his actions or policies once in office, particularly as Trump has said he will be more crypto-friendly, which will likely further inflate the coin’s value at least temporarily,” Painter said.

While executive branch employees must follow conflict of interest criminal statutes that prevent them from participating in matters that impact their own financial interests, the law does not apply to the president or the vice president.

The Trump coin was announced on Friday, the final business day before the resignation of Gary Gensler, the outgoing chairman of the Securities and Exchange Commission and an enemy of the crypto industry. Trump had vowed to replace Gensler, who announced in November he would step down at noon on Inauguration Day.

Walter Shaub, the ethics watchdog who clashed with Trump during his first term before stepping down, sounded the alarm about Trump’s second term.

“America voted for corruption, and that’s what Trump is delivering,” Shaub told CNN in an email. “Trump’s corruption and naked profiteering is so open, extreme and pervasive this time around that to comment on any one aspect of it would be to lose the forest for the trees. The very idea of government ethics is now a smoldering crater.”

California Rep. Ro Khanna, a Democrat, said in a post on X that elected officials “must be barred from having meme coins by law,” describing them as “highly speculative and like gambling.”

The Trump transition team did not immediately respond to a request for comment.

Earlier this month, the Trump Organization announced Trump will not be involved in managing his real estate and branding empire during his first term in office and appointed an outside ethics monitor to keep an eye on company actions. Previous presidents have taken more significant steps to avoid conflicts of interest and the appearance of self-dealing, including by putting their businesses in blind trusts.

Anthony Scaramucci, a former Trump official turned critic, said in a post on X that the “most dangerous thing” about the Trump coin is that now “anyone in the world can essentially deposit money” into the bank account of the president of the United States with just a few clicks.

“Every favor – geopolitical, corporate or personal – is now on sale, right out in the open,” said Scaramucci, who is a supporter of the crypto industry.

Some others in the crypto industry were startled by the timing of the Trump move.

“Trump owning 80% and timing launch hours before inauguration is predatory and many will likely get hurt by it,” Nick Tomaino, a former Coinbase executive, said in a post on X. “Trump should be airdropping to the people rather than enriching himself or his team on this.”

Crypto investor Nic Carter, who has described himself as a Trump supporter, told Politico it is “absolutely preposterous” Trump would do this.

The Trump coin’s market capitalization, which is based on the 200 million coins circulating, is capped at $13 billion, according to CoinMarketCap. The meme coin’s website said there will be 1 billion Trump coins over the next three years.

Both $MELANIA and $TRUMP’s websites contain disclaimers saying the coins are “intended to function as a support for, and engagement with” the values of their respective brands and “are not intended to be, or to be the subject of, an investment opportunity, investment contract, or security of any type.”

The website says the meme coin is not politically affiliated. But 80% of the coin’s supply is held by Trump Organization-affiliate CIC Digital and Fight Fight Fight LLC, which are both subject to a three-year unlocking schedule – so they cannot sell all of their holdings at once.

Trump coin’s fully diluted value (which reflects the eventual total supply of Trump coins) stood at around $54 billion as of Monday morning, according to CoinMarketCap. At that value, the 80% linked to Trump is worth a staggering $43 billion, at least on paper.

The $TRUMP coin’s website says it is “the only official Trump meme.”

“Now, you can get your piece of history. This Trump Meme celebrates a leader who doesn’t back down, no matter the odds,” the website reads.

By Lex Harvey, Auzinea Bacon and Matt Egan, CNN