The launch of $TRUMP and $MELANIA memecoins by former President Donald Trump and his wife just days before his inauguration has sparked controversy in the cryptocurrency industry, the Financial Times reports.
Executives warn the coins could harm the sector’s reputation and pose significant risks for retail investors, as the tokens have already lost over half their initial value since their debut.
The memecoins were introduced with significant fanfare, with $TRUMP’s value briefly reaching $14.5 billion and $MELANIA’s nearly $3 billion over the weekend. However, their value quickly plummeted, raising accusations of conflicts of interest and concerns about investor losses.
Nic Carter, founding partner at Castle Island Ventures, criticized the move:
“Call me old-fashioned, but I think presidents should focus on running the country, not launching volatile crypto tokens.”
Other industry leaders echoed these sentiments, pointing out the potential for ethical conflicts given Trump’s ability to influence crypto regulations.
The majority of trading activity for the Trump tokens occurred on lesser-known exchanges in Asia, such as BiKing and Gate.io, according to CoinMarketCap data. Memecoins, which lack tangible value or practical use, often see their popularity—and prices—rise and fall unpredictably.
“This meme coin represents the worst of crypto,” said Congresswoman Maxine Waters.
She cited concerns over possible abuse of anti-corruption and national security laws.
Industry insiders fear the memecoins are diverting attention and resources away from legitimate blockchain projects.
“This will cost retail investors and harm the industry’s credibility,” said Serge-Raymond Nzabandora of Yield Guild Games.
Critics argue that Trump’s involvement in memecoins raises questions about oversight and accountability. Terms on the tokens’ website prohibit participants from joining class action lawsuits, leading to skepticism about protections for retail investors.
Anthony Scaramucci, founder of SkyBridge Capital, voiced concerns during a panel discussion in Davos:
“It’s going to slow down progress in the regulatory process and damage the industry.”
Despite promises of crypto-friendly regulations, many in the industry are doubtful that Trump’s enthusiasm for memecoins will benefit the sector in the long term. With 80% of the $TRUMP tokens held by entities affiliated with the Trump Organization, the situation has fueled further criticism about transparency and fairness.
As the crypto industry works to rebuild its reputation following a series of high-profile collapses and fraud cases, the Trump memecoins highlight the ongoing challenges of balancing innovation with investor protection.
