Behind Trump’s Crypto Empire: A Triple Game of Regulation, Ethics, and Financial Risks

原題: Trumps newest grift: Building a cryptocurrency empire while destroying its regulators

Original author: Molly White

Original translation: Daisy, ChainCatcher

With Trump back in power, the 暗号currency industry is experiencing an unprecedented loosening of regulation. Taking this opportunity, the Trump family quickly laid out related industries and created a crypto empire with a market value of billions of dollars, covering platform construction, token issuance, infrastructure control and even market manipulation, with power and capital closely intertwined.

This process not only brings huge profits, but also raises serious conflicts of interest and abuse of power. From platform holdings to policy intervention, from meme currency speculation to potential insider trading, the Trump family is turning the national regulatory system into a tool for their own profit.

This article will sort out the operation path of the family crypto business, reveal how it profits in a regulatory vacuum, and explore the institutional risks caused by this crypto empire expansion.

Financial backers provide blood transfusions and rules are loosened: How can crypto capital quickly open up channels between government and business?

After Trump returned to power, he quickly received at least $20 million in political donations from crypto industry financiers, including $5 million each from Ripple and Andreessen Horowitz, and millions of dollars in support from giants such as Coinbase, Gemini, Kraken, and Circle.

These financiers were rewarded with policies: at least eight U.S. Securities and 交換 Commission (SEC) enforcement cases against crypto companies were withdrawn or suspended. Many companies were also included in the new rule-making process, taking the opportunity to tailor market rules for themselves in an environment with a lack of supervision, low compliance requirements, and weak consumer protection.

The loosening of policies not only allowed the donating companies to make huge profits, but also cleared the institutional barriers for the Trump familys crypto expansion and laid the prerequisites for the entire set of business operations.

ソース： Follow the Crypto

World Liberty Financial: The core asset of Trumps crypto empire

In August 2024, Trump and his partners founded the crypto company World Liberty Financial. Steven Witkov, the father of project co-founder Zach Witkov, is a long-time ally of Trump and the current special representative for the Middle East. He was recently appointed as Putins personal envoy and a key figure in facilitating the project.

Although the platforms promotion and positioning were almost all centered around Trump himself, and the official website also listed his son as a DeFi visionary and Web3 ambassador, and promised that 75% of the protocol revenue would belong to him, the family still tried to create a keep your distance attitude in the early days. It was not until Trump took office again that he officially held a 60% stake and became the actual controller.

Source: World Liberty Financial website homepage

Although no trading platform has been launched yet, World Liberty has raised as much as $550 million. Based on the share ratio, Trump is expected to make a personal profit of nearly $400 million. The company claims to build a financial democratization platform and issue a stablecoin USD 1, which is in sharp contrast to Trumps previous position of calling stablecoins government-controlled financial instruments.

It is worth noting that $75 million of the project came from Justin Sun, a foreign crypto entrepreneur who was investigated by the SEC and the Department of Justice for suspected fraud and could not donate directly to Trump. Subsequently, Sun was appointed as an advisor to World Liberty, and the SECs lawsuit against him was shelved after Trump took office.

$WLFI issued by World Liberty is デフィned as a governance token and should theoretically give holders voting rights, but the platform team unilaterally promoted major matters including the issuance of stablecoins without any vote. The token also has a number of regulatory circumvention clauses, is only available to non-US citizens or qualified investors, and is currently not tradable. Some investors bet that once SEC regulation is further weakened, the relevant restrictions will be lifted and the token may be able to enter the secondary market to bring returns.

At the same time, the project was widely questioned for suspected insider trading. The media revealed that World Liberty had purchased Movement Labs tokens for about $2 million, just as the latter was rumored to be negotiating blockchain cooperation with Musks Government Efficiency Department. Although both parties denied it, the market reacted strongly.

On April 8, 2025, a memo issued by Deputy Attorney General Todd Branch showed that the Department of Justice officially disbanded the cryptocurrency investigation team and terminated all related law enforcement actions in accordance with an executive order signed by Trump. This move almost cut off the federal investigation path into the Trump familys encryption business.

The timing of USD 1’s release also attracted attention: On March 25, World Liberty announced that it would issue the stablecoin. Just ten days later, the SEC stated that “certain types” of stablecoins were not within its regulatory scope and companies could issue them without registration. At the same time, pro-Trump factions in Congress are pushing for legislation to relax regulatory restrictions on stablecoins. Behind this is the more than $130 million in lobbying funds invested by the crypto industry in the last election cycle.

In addition, World Liberty is negotiating with Binance to list USD 1 on its platform. Once reached, the project will be connected to the user system of the worlds largest crypto exchange, with huge profit potential. At this time, Binance is negotiating with the US Treasury Department on compliance matters, trying to lift the regulatory agreement previously established due to anti-money laundering violations, which originated from the judicial settlement reached after it paid a fine of more than US$4 billion.

Truth Social and Truth.Fi: Social platforms turn to crypto investing

Trumps Trump Media Technology Group (TMTG), the parent company of Truth Social, has also begun to enter the crypto field in recent years. The company has been listed on the public market with a valuation of approximately US$2 billion, and Trump holds approximately 53% of the shares. Recently, TMTG also applied to allow the trust fund controlled by Donald Trump Jr. to sell its shares.

In January 2024, TMTG announced that it would enter the fintech field under the brand name Truth.Fi and launch so-called America First investment products. On March 24, the company announced a partnership with Singapore Exchange Crypto.com. It is worth noting that the platform was previously under investigation by the U.S. Securities and Exchange Commission (SEC) and received a Wells Notice in August of the same year, indicating that it would face enforcement action. However, just three days later, Crypto.com announced that the SEC had terminated its investigation.

At the same time, TMTG said it would use up to $250 million in cash reserves to invest in crypto assets such as Bitcoin. Through this move, the company – actually Trump himself – is expected to directly profit from his words and deeds that drive the market up. Policies such as his proposal to establish a strategic reserve of Bitcoin and promote government funds to purchase Bitcoin may have a substantial impact on the market.

Blockchain gaming plans and loose regulation: from Monopoly to real-world arbitrage

According to Fortune magazine, Trump is preparing to launch a blockchain real estate themed game, which is similar to Monopoly but built on a cryptocurrency system. It focuses on Play-to-Earn to attract players to obtain actual benefits through the game.

This type of game has been criticized repeatedly in the past, with the problems mainly focusing on the imbalance of economic structure and moral hazard. Rich players can win by spending money, while those with poor economic conditions even find it difficult to enter the market. The system is highly dependent on the influx of new players to maintain the value of tokens, and once the growth rate slows down, it will be at risk of collapse.

Axie Infinity, which became popular in 2021, once triggered a digital tenant farming model: rich people rented game assets to players in low-income countries, promising them to earn more than local wages through the game. This type of gameplay eventually caused widespread ethical controversy, involving minors participating in gambling-like mechanisms and players losing all their money after investing real money. In March 2022, the game was also attacked by North Korean hackers, resulting in a loss of approximately US$625 million, and the token price has not recovered to date.

In recent years, US regulators have begun to strengthen their scrutiny of such projects. When the SEC sued Coinbase and Binance, it accused them of listing unregistered securities, including $AXS from Axie Infinity, $SAND from The サンドボックス, and $MANA from Decentraland. At the same time, the Consumer Financial Protection Bureau (CFPB) is also concerned about exploitative behavior in the cashing out of game coins, especially involving underage players.

However, these regulatory barriers are being quickly removed after Trump returned to power. He pushed for the relaxation of restrictions on crypto companies, including deregistration, compliance, accountability, and gambling mechanism supervision. The SEC recently accelerated the withdrawal of a number of enforcement actions against Binance, Coinbase and related game tokens, and announced that most crypto assets are no longer under its regulatory scope, while inviting industry executives to participate in the formulation of new regulations.

The Trump administration has also pushed to shut down the CFPB completely, a proposal that has been publicly supported by senior crypto executives. Congress is also cooperating, with the House of Representatives and the Senate having passed a bill to repeal the CFPBs regulatory rules for crypto games, which were originally intended to strengthen protection for underage users and non-gaming crypto asset investors.

The bill shows a clear partisan split: Democrats and independents unanimously oppose it, and all Republicans support it except for one Republican senator who symbolically opposes it. Currently, the bill is waiting for Trump to sign it. Once it is signed, it will not only completely end the regulatory barriers to related behaviors, but will also bring direct benefits to him and the crypto projects he is involved in.

Trump family enters Bitcoin mining, raising suspicion of profit transfer

At the end of March 2025, Trump’s two sons, Eric Trump and Donald Trump Jr., announced their investment in the Bitcoin mining company American Bitcoin, with Eric serving as chief strategy officer.

The company was established with the assistance of mining company Hut 8, which transferred almost all of its mining equipment to the new company, sparking industry doubts. VanEck analyst Matthew Sigel commented: I really cant understand why they only exchanged 80% of the remaining shares of the previously 100%-controlled subsidiary for 61,000 mining machines. Many observers believe that this is more like a political stock swap – Hut 8 gave up 20% of its equity to the Trump family in exchange for policy convenience and potential returns.

Eric Trump said that the company plans to go public in the future and will cooperate with World Liberty Financial. He also revealed that he will keep some of the mined ビットコインs, betting that Trump will push up the price of bitcoin again and gain asset appreciation from it.

The Trump family cashed out hundreds of millions of dollars by launching memecoin

Just before Trump was re-elected as president, he launched a meme coin called $TRUMP, which even shocked some crypto supporters. Some industry insiders bluntly said that his behavior was naked money-making and criticized it as absurd and setting a new low for stupidity.

Soon after, the family launched the $MELANIA meme coin, which further sparked controversy. The Financial Times estimated that as of early March, the Trump team had cashed out at least $350 million through these two tokens. On April 15, a wallet address controlled by Trump was suspected of cashing out $4.6 million again.

At the same time, the $MELANIA team is suspected of selling about $4.5 million worth of tokens from late March to early April. On April 7, the on-chain analysis platform Bubblemaps revealed that project insiders transferred about $30 million worth of tokens from a wallet marked as community distribution and sold them on a large scale. More noteworthy is that the team was previously accused of manipulating $LIBRA tokens related to Argentine President Mile, as well as insider trading of multiple Solana-based meme coins.

In the initial distribution of $TRUMP tokens, Trump and his affiliates hold up to 80% of the control, with a three-year linear unlocking mechanism. The first round of unlocking is about to start, and Trump can sell up to 40 million tokens, which is valued at about $310 million at current prices. At the same time, a large number of early investors have been hit hard, and the price of the coin has fallen from a peak of $75 to less than $5.

Despite the suspicion of market manipulation or insider trading, there is almost no regulation. On February 27, the SEC made it clear that memecoin is not within its regulatory scope. Conventionally, such potential criminal behavior should be intervened by the Department of Justice, but the department has been instructed to prioritize resources in areas such as immigration and government procurement fraud and the crypto market has been put on hold.

In other words, the Trump family is taking advantage of the regulatory vacuum to trade low risk for high returns in the memecoin market.

NFT operations take another step: from purchasing unpopular works to selling suspect cards

In addition to cryptocurrencies and meme coins, the Trump family is also actively involved in the NFT (non-fungible token) market. As early as December 2021, Melania Trump launched her first NFT series, but the market response was cold. The work with a starting price of about $250,000 was not bid for, and it was suspected that she bought it for about $170,000.

In July 2023, she launched her second series, which again sparked controversy. This project used NASA images, allegedly violating its prohibition on commercial use. The series also sold poorly, with only 55 pieces sold in a week and sales of less than $5,000.

In contrast, Trumps own performance in the NFT project is more commercially rewarding. He launched the first batch of digital trading cards (Trump Cards) in December 2022, deliberately downplaying the NFT label. This set of cards creates an idealized image through illustrations – muscular, young and handsome, wearing Superman or cowboy costumes, with an exaggerated style that is out of touch with reality.

One of Trump’s “digital trading cards” (from OpenSea)

Subsequent series went a step further, directly using Trumps suspect registration photo as the theme and setting up an upgrade reward mechanism for buyers, including fragments of the suit worn in the registration photo and even the opportunity to have dinner with him during his criminal trial in New York.

The Trump family’s crypto holdings are unclear, but their words and deeds are linked: The Trump family’s crypto holdings are attracting attention

Although the Trump familys crypto asset holdings are still opaque, public financial declarations and on-chain records provide some clues. In August 2024, Trump declared that he held Ethereum (ETH) worth between $1 million and $5 million, which basically matched the balance of about $2.28 million in his wallet at the time. Since December of that year, the wallet has begun to sell ETH on a large scale and has now sold most of its holdings.

The holdings of other family members have not been disclosed, but they obviously have the opportunity to directly profit from market fluctuations under the influence of policies. Some people even take the initiative to influence the market. For example, Eric Trump wrote in February this year: Now is a good time to increase your holdings of $ETH, remember to thank me later. Almost at the same time, World Liberty Financial, led by the Trump family, transferred a large amount of ETH to Coinbase, which aroused doubts from the outside world about the order coordination behavior.

What is even more worrying is that there may be insider trading risks among Trumps close circle. They are well aware of Trumps style of doing things and may also have access to non-public information, and Trumps sudden policy decisions have repeatedly caused severe shocks to the market.

A recent example is particularly typical: after Trump announced the Liberation Day tariff policy, which caused a sharp drop in the stock market, there were signs that some informed people bought at low prices and took advantage of the market rebound after the announcement of the policy suspension to profit and exit. Similar operations may also occur in the crypto market. The prices of assets such as Bitcoin fluctuate violently. If you know the policy direction in advance, it is very easy to make considerable profits by taking advantage of the information gap.

The ultimate form of power monetization: from regulatory collapse to systemic risk

The Trump familys conflict of interest in the crypto space has long surpassed the emoluments clause controversy during his first term. By deploying multiple projects, Trump has built a whole set of power-for-profit paths: profiting directly from tokens and companies, promoting regulatory policies that are beneficial to his own investments, engaging in suspected insider trading, and providing external forces with a channel to exchange investments for political influence – if converted into campaign donations, these actions would constitute violations of the law.

At the same time, the regulatory system is being systematically dismantled. Trump continues to weaken the constraints on the crypto market, exposing ordinary investors to the risks of fraud and manipulation, while he and his financial backers are almost free of substantive scrutiny.

Despite the increasingly obvious signs of abuse of power, the current checks and balances mechanism remains ineffective. Although some Democratic lawmakers have written to the SEC Inspector General, senior officials of the Department of Justice and several state attorneys general, calling for an investigation into the conflicts of interest of Trump and his team, no substantive progress has been made public so far.

What is even more alarming is that the continued collapse of regulation is leading to a high degree of overlap between the president’s personal financial interests and national policy power, and the crypto market has gradually become an arbitrage field for the powerful: high-risk lending projects are disguised as financial democratization, fraudulent activities are packaged as technological innovation, and meme coins have evolved into a tool for pumping and dumping.

In this process, ordinary investors are marginalized and have no way to protect their rights. The risks of this deregulation experiment are spreading to the traditional financial system. As banks exposure expands and pension and retirement funds become involved, the entire society is quietly bearing the systemic costs that may be profited by a very small number of people but paid by the whole people. Once the bubble bursts, the victims will not only be the speculators, but also the ordinary people who have never participated in it.

This article is sourced from the internet: Behind Trump’s Crypto Empire: A Triple Game of Regulation, Ethics, and Financial Risks

Related: Hundred-fold leverage life and death game: A review of the recent crazy games and gambles of crypto whales

Original author: Fairy, ChainCatcher Original editor: TB, ChainCatcher Since February 25, the price of Bitcoin has entered a violent oscillation mode, experiencing a large N-shaped fluctuation in just one week, with an increase or decrease of more than 15%. The Crypto Greed and Fear Index continues to be in the fear zone. When retail investors are panicking in the liquidation alarm, the top whales smell the smell of blood… In this market game, some people accurately bought at the bottom and sold at the top, making millions; others bet on the wrong direction and suffered liquidation. Who is turning the tide in the market? And who is defeated in the turmoil? This issue will analyze in depth the recent magical operations of whales in the market and decode how crypto…