President Trump and his business partners promoted it as the world’s most “EXCLUSIVE INVITATION” — a dinner with the president of the United States for the cryptocurrency investors who bought the most of his family’s memecoin, called $TRUMP.
But as the unusual contest came to a close on Monday, at least 17 of the 220 winning bidders had figured out a way to effectively outsmart the sponsors of the contest.
These crypto investors had secured an invitation to the dinner even though their online wallets showed that they held zero of the memecoins, a type of novelty digital currency often based on a joke or mascot.
That is because of a quirk in the rules: The winners were selected based on the average number of coins they held during the three weeks the contest was underway rather than their total at the end of bidding.
Participants expected the price of the coin to crash as soon as the contest ended. And it did just that on Monday afternoon, plunging by 6.5 percent once the winners were announced. By that point, nearly 20 of the contestants had sold off or transferred all their $TRUMP holdings, according to an analysis by The New York Times.
These traders had managed to benefit from the surge in price driven by the contest’s promotion and still secure a seat at the dinner, set for May 22 at the Trump National Golf Club in Virginia.
That was not the plan. Mr. Trump and his partners, who control 800 million of the coins, stood to benefit if the price stayed high. So Mr. Trump had been urging people to buy the coins throughout the auction period, and his partners encouraged investors to keep holding them even after it ended.
The trading frenzy started on April 23, when a website associated with Mr. Trump’s coin announced the contest. The site said that Mr. Trump would attend a dinner with the coin’s top 220 holders, as well an “Exclusive Reception” with the top 25, who would also win a White House tour the next day. An arcade-style leaderboard tracked the rankings, allowing the crypto investors to see what they had to spend to make the cut.
The competition set off a surge of trading activity, as investors vied for a chance to meet with Mr. Trump and, in some cases, use that access to push for policies that would benefit the crypto industry.
But the contest was also an opportunity for rapid profit-taking by sophisticated traders.
One buyer purchased $2.2 million worth of the $TRUMP coin in early April, a couple of weeks before the contest started. By last Thursday, the account appeared to have sold it all, pocketing $957,779.25 on the flip. (The buyers were identified only by their chosen nicknames. This buyer was called “Noah.”)
But because that buyer’s account had so many coins early in the process, it was ranked 25th on the leaderboard, meaning whoever controls it should secure a dinner seat, as well as the White House tour.
The contest has drawn criticism from both Democrats and Republicans on Capitol Hill, as well as some ethics lawyers, who called it a corrupt moneymaking grab by Mr. Trump.
“I could never have imagined any leader of the United States engaging in this kind of grift,” Senator Jeff Merkley, Democrat of Oregon, said in an interview on Monday. “The White House and President Trump are selling access to the government and himself for personal profit.”
Particularly disturbing, he said, is that most of the contest winners remain anonymous and that many of them, based on the exchanges they used to purchase the coins, appear to be from overseas, while others have said publicly that they bought in to try to influence U.S. policies.
Mr. Merkley has introduced a bill that would ban any president, vice president or senior executive branch official and their family members from profiting from a crypto sale. He has also asked the Office of Government Ethics to investigate Mr. Trump’s role in the $TRUMP venture.
A White House spokesman did not respond on Monday to a request for comment on the contest or whether the White House tour would take place as planned. Last week, the White House press secretary, Karoline Leavitt, said the president acts with only the interests of the American public in mind and that he did not have a conflict of interest.
Overall, the winners of the contest held $182 million worth of the $TRUMP coins at the time the contest closed. They had spent $191 million to buy those coins, meaning that, in aggregate, the winners had lost more money on the purchases than they had gained, according to an analysis of public transaction data by The Times.
This is consistent with trading data that shows that most buyers of the coin since it was first introduced in January have lost money — a total of $3.9 billion, according to an analysis by Inca Digital, a crypto data firm.
Whether traders make or lose money, the Trump family and its partners get a transaction fee each time the coins change hands, earning at least $320 million since $TRUMP went on sale in January, according to an estimate by Chainalysis, an industry data analyst.
On Monday, the contest’s organizers seemed eager to stop the sell-off, presumably aware of the possibility that even more of the dinner guests might dump their coins now that the competition has ended.
In a post on X, the official account promoting the memecoin said that anyone who held onto their $TRUMP stash between now and the dinner would be rewarded with a “TRUMP DIAMOND HAND” nonfungible token — a type of digital collectible known as an NFT.
The account also announced that the coin’s holders would soon start earning “rewards points,” without explaining how points would be distributed or what they would be used for. By Monday evening, the price of the $TRUMP coin had inched up once again.
Eric Lipton is a Times investigative reporter, who digs into a broad range of topics from Pentagon spending to toxic chemicals.
Dylan Freedman is a machine-learning engineer and journalist working on a team at The Times that leverages A.I. for reporting.
David Yaffe-Bellany writes about the crypto industry from San Francisco. He can be reached at [email protected].
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