This is an edited transcript of an episode of “The Ezra Klein Show.” You can listen to the conversation by following or subscribing to the show on the NYT Audio App, Apple, Spotify, Amazon Music, YouTube, iHeartRadio or wherever you get your podcasts.
Last week the Trump administration formally accepted a Boeing 747 luxury jet from the government of Qatar.
This is, if you haven’t seen it, a very nice plane. And President Trump’s plan at the end of his term is to donate this very nice plane to his own presidential library. Because, as you know, no presidential library — no library, really — is complete without a luxury airplane.
Even if this is legal, the conflict of interest here is obvious. It looks incredibly corrupt, at the very least. But here’s the thing: Something like this usually comes with a cover-up.
But with Trump, there wasn’t a cover-up.
Archived clip of Donald Trump: They’re giving us a free jet. I could say, “No, no, no, I want to pay you a billion” or $400 million or whatever it is. Or I could say, “Thank you very much.”
People are supposed to be hiding what they’re doing. When it happens just out in the open like this, I think it becomes hard for a political system, even for the media, to know what to do with it.
But the biggest area of corruption for the Trump family, the soft underbelly of this administration, right now is not airplanes. It’s crypto.
Archived news clips:
Clip 1: President Trump and his family’s growing crypto empire.
Clip 2: Trump is a stakeholder in something he is also a chief regulator of.
Clip 3: The Trump family is indeed cashing in.
Clip 4: Chinese billionaire Justin Sun publicly disclosed a $75 million investment.
Clip 5: A $2 billion deal with a foreign government.
Clip 6: Pakistan becoming the latest country to partner with World Liberty Financial.
Clip 7: World Liberty Financial.
Clip 8: The Donald Trump memecoin.
Clip 9: Which now has a value of about $2.5 billion.
Clip 10: A high-powered dinner for a price.
Clip 11: Looking to become the country’s largest Bitcoin miner.
Clip 12: Its own dollar-pegged stablecoin, USD1.
Clip 13: This is unprecedented.
Archived clip of Eric Trump: And I think it’s going to change our modern financial system forever. [Audience applause.]
Steve Bannon talked about using muzzle velocity as a strategy — doing so much so quickly that it overwhelms the ability of the media to cover it.
What the Trump family is doing with crypto is muzzle velocity for corruption. There are so many different companies and coins that it is almost impossible to keep track.
So with this episode, I wanted to try to track at least some of it. And the person who’s going to help me out is Zeke Faux. He’s an investigative reporter at Bloomberg, the author of the fantastic book “Number Go Up: Inside Crypto’s Wild Rise and Staggering Fall,” and he’s been reporting on many of these strange crypto projects.
Ezra Klein: Zeke Faux, welcome to the show.
Zeke Faux: Thanks, Ezra.
Let’s start back in July 2019. This is late in the first term, and you have Donald Trump tweeting as president: “I’m not a fan of Bitcoin and other cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air.”
So tell me about the Trump administration’s relationship with crypto during his first term.
Yes, that was pretty much his attitude. Whenever he was asked about crypto, it hadn’t yet entered the mainstream. The crypto Super Bowl, when we saw all these ads for Sam Bankman-Fried’s FTX, we had LeBron James endorsing crypto — that was 2022. It seemed kind of like a fringy thing for nerds.
There was another time that he called Bitcoin a scam against the dollar —
I slightly view the whole second Trump administration as a scam against the dollar. But that’s a different situation maybe. [Laughs.]
He staffed his first administration with a lot of mainstream Wall Street people who viewed crypto as this unregulated threat to the financial system.
So at that time, the Securities and Exchange Commission under Trump initiated some lawsuits against big crypto companies, some of the same ones that they were still fighting and angry about years later.
You mentioned 2022 and this big cultural boom we had in that era. This is the moment that NFTs were everywhere. You have Matt Damon doing these ads, and Larry David telling you not to miss out.
This is when something begins to change for Donald Trump. He’s out of office. There’s some reporting that his cash flow situation is not what he would like it to be. And he releases a series of Trump digital trading cards. What are these?
So the technical term for these are NFTs — nonfungible tokens.
You might remember the Bored Ape Yacht Club. These were really ugly cartoons of monkeys that sold for $300,000 or $400,000 for a couple months.
After NFTs had pretty much crashed, Trump came out with his own series. And these are digital pictures of Trump looking superjacked. In some, he’s an astronaut and in others, he’s a hunter.
This was an idea —
[Laughs.] Sorry, it’s so funny. Can you imagine releasing a series of commemorative cards about yourself that are not just pictures of you, but pictures of you looking tougher and more heroic and more jacked?
I’m going to make this worse now. So this was an idea pitched to him by Bill Zanker, who used to run The Learning Annex and co-authored “Think Big and Kick Ass in Business and Life” with Trump.
So they go way back. And Bill Zanker had actually been working with Sylvester Stallone on an NFT collection that was going to be called PlanetSLY. It didn’t happen, and it looks like they reused the PlanetSLY art for the Trump NFTs.
So you got Trump in all these Stallone poses. It costs $99 to own one.
When you buy an NFT, you don’t own the picture in the sense that no one else can use it, no one else can look at it. You just have registered your ownership of this card on the blockchain. You can prove that you are the one who paid $99 to buy this image of Trump looking really jacked. And then you could go sell it to someone else, and they would then be registered as the owner on the blockchain. That’s what makes it crypto.
They released about 200,000 of these cards, and Trump and his partners made an estimated $20 million.
Twenty million dollars is not nothing for an incredibly cheap project.
Yes. And he was endorsing a lot of stuff at this time. He went on to do Bibles —
Trump Bibles —
Sneakers —
Trump commemorative coins.
But this is a little bit benign. This is not a currency. It is what it says it is. You can buy these Trump digital images, and you have proof of ownership. It’s just a moneymaking scheme.
Yes. He held a couple events at Mar-a-Lago to celebrate this collection, and he invited people who had bought a certain number of the cards. And at these events, he sounded a little bit more friendly to crypto.
What kinds of people are coming to these events? Are the people buying enough of these cards crypto magnates who recognize they can get an audience with Donald Trump? Or are these just rando MAGA die-hards who want a cheesecake calendar of their hero?
It was more randos. But there were a few crypto guys who either thought that this was funny and that it would be cool to go to Mar-a-Lago. It didn’t cost that much to buy enough to get in. It was maybe $10,000 worth of cards.
What happens at this dinner?
There are lots of questions about crypto. People are taping this, so the stuff he said came out later. And Trump is sounding more positive, but it’s clear that he doesn’t entirely have the subject down yet.
For example, someone asks him about central bank digital currencies. This is something that crypto guys hate. They don’t want the government to get into the crypto business and compete with them.
And Trump says: Oh, that could be interesting. When the right answer would be: Oh, I hate it. That’s a Democrat thing. I’m going to ban those.
But generally about crypto, he says: More and more, I’m for it.
There’s something else going on at the same time. Joe Biden is president. Gary Gensler is his S.E.C. chair. Gensler is a huge crypto skeptic. He wants crypto regulated as securities, for the most part, which crypto people hate.
At this point, what is the relationship between the crypto world and the Biden administration?
I think it’s helpful to take a step back and think for a minute about what is happening in crypto.
Because if you’ve never really thought about it too much, you might think about crypto as some sort of alternative to the dollar — like a currency we’re going to use to buy our coffee or pay for our house or whatever.
That hasn’t happened. Bitcoin has now been around for 15 years. It’s as old as Uber or WhatsApp, things that we use every day.
What has happened is that people have made thousands, maybe even millions, of random coins that do all sorts of different things that people can gamble on. And tons and tons of these coins have turned out to be scams.
So as this insane bubble inflated, the Biden administration didn’t really take a lot of action. Once the bubble popped and people started losing a lot of money, Gensler’s S.E.C. sued many of the biggest players in crypto and said: Hey, the thing that you’ve been doing out in the open for the last couple years, letting people gamble on all these coins — it’s illegal. These are securities. They should be registered with us. They should be regulated like we regulate stocks. And by allowing people to trade them, you’ve broken the law.
And Gensler is saying: You basically have to stop.
Now, they didn’t stop. They’re fighting the lawsuits. But Gensler became the industry’s big enemy, and some in the industry realized that maybe they needed to get more involved in politics, that maybe some lobbying could help their cause.
And these are people with a lot of money now. One thing that always fascinates me about the crypto folks is that, in many cases, their money went from pretty modest to billions so quickly that they treat it like play money. Because to them it really does have this abstracted quality.
In politics, it’s a big deal if a donor comes in with a million dollars, $10 million, $20 million. Thirty million dollars is a whale. If there’s a donor, an industry willing to do $30 million, politicians fall over themselves to get in front of that.
Tell me a bit about the financial artillery that the crypto titans begin bringing to bear here.
Sam Bankman-Fried once said: People say there’s too much money in politics. I’m actually surprised by how little there is.
These politicians control huge sums of money. It’s worth spending what he views as a little bit to try to influence them. So some other guys get this idea, and the one who I think is the most influential and kind of underappreciated is David Bailey.
He’s the chief executive officer of Bitcoin Magazine, a glossy publication for people who really like Bitcoin. He got together with a couple of friends, and they started to strategize: How can we get Bitcoiners in front of the president? How can we get the president on our team?
The real goal is: How do we get Trump to come to our Bitcoin conference? Which happens every year. It’s a big rally where tens of thousands of Bitcoiners come in.
Bitcoiners are a little different from crypto writ large. These guys think that Bitcoin is the one true coin. They might even think most of the other ones are scams, and they think that Bitcoin’s price is going to go to a million. It’s going to solve all the world’s problems, make us all really rich.
So it turns out that one of David Bailey’s friends has a connection to Paul Manafort, who had been Trump’s campaign manager. They consult with him and come up with a plan.
David Bailey actually described some of his lobbying on a podcast called “Galaxy Brains.” And this is what he said about approaching the Trump campaign:
Archived clip of David Bailey: Donald Trump is — it’s not about left versus right politics. As somebody at my company said the other day, it’s like orange versus green politics. And Donald Trump is a vessel for us to let the, you know, game theory of Bitcoin play out. And it has already generated dividends, and it is going to generate dividends that are hard to even comprehend or calculate over the next four years.
What Bailey decided was that he would get a few Bitcoiners, and they would all max out. The most you can give to Trump — and, I guess, a bunch of campaign committees — totals $844,600.
And what Bailey said that he realized is that even 10 people who gave that much could have a huge impact. And he described in this podcast his goals, which sounded to me to be totally insane. He said that he wanted the U.S. government to start buying Bitcoin, which would start an international race to acquire Bitcoin and drive the price up to a million dollars per Bitcoin.
Archived clip of Bailey: If we act together in unison, the price of Bitcoin is going to the [expletive] moon. I mean, this is the type of — when people say: What’s going to send Bitcoin to a million dollars of Bitcoin? This is what sends it to a million dollars of Bitcoin.
He said this all before Trump came to the conference — which he did.
Before we get to the conference, I want to note that goal for a second.
As you mentioned, there is an older, more idealistic view of cryptocurrencies — that they’re going to be new, untraceable, trustless currencies that will replace the things we use, like dollars and yen, to buy things.
I think that concept has sort of fallen by the wayside. Your great book, which I love and recommend to people, “Number Go Up,” is all about the embrace of the idea that the point here is more: People buy in, and then number go up.
But for that to keep happening, you need more people to keep buying in. One way you could do that is mass-scale advertising. You’re paying people like Matt Damon, Larry David and Tom Brady or supermodels to advertise your crypto platforms and get dumb money in.
But the biggest money is government money. And if you could put a lot of government monies into a scarce financial product, by definition, you have driven up the price of that product for everybody owning it beforehand by a lot.
In some ways, it’s a completely insane place for the original anti-government Bitcoin idealists to end up. But if all you want to do is make number go up, it would be pretty sweet. [Laughs.]
Right? It’s helpful to picture a pyramid. Maybe at the top are the early adopters, the nerds, the anarchists, the ones who wanted untraceable money.
But by this time, the pyramid is getting pretty big. You’ve brought in the dumb money. You’ve got Bitcoin E.T.F.s that let people invest in Bitcoin through their IRAs. How are we going to keep making number go up?
The base of the pyramid is really wide. We need giant pools of money, governments, to buy Bitcoin.
All right, so they do get Donald Trump to come to the 2024 Bitcoin conference. You’re at this conference. What’s the vibe?
First off, I thought: OK, maybe he’ll do it by video. He’ll say: Hey, Bitcoiners, have fun. Great conference — whatever.
Then it became clear that he was coming. And I thought he’d just run through the greatest hits. We’d get a speech about “Crooked Hillary,” maybe he mentions Bitcoin once.
But no. When he took the stage at the end of the conference, he ran through everything that David Bailey had said he was going to do.
Archived clip of Donald Trump: If Bitcoin is going to the moon, as we say — it’s going to the moon — I want America to be the nation that leads the way. And that’s what’s going to happen.
And he said that he did not want China to get crypto.
Archived clip of Trump: Because if we don’t do it, China is going to be doing it, others are going to be doing it. Let’s do it, and do it right.
Which is kind of funny because China has basically banned crypto. But David Bailey had suggested that a good way to get Trump on board would be to suggest that there was some sort of competition with China.
Trump also said he would fire Gary Gensler and end the war on crypto.
Archived clip of Trump: I will fire Gary Gensler and appoint a new S.E.C. chairman. [Audience applause.]
And the applause was so loud he said it again.
Archived clip of Trump: Let me say it again [audience laughs]: On Day 1, I will fire Gary Gensler. [Audience cheers.] Whoa.
There’s a funny dynamic to his speech. In some ways, this is one of those Trump speeches that, I think, even people who don’t like him enjoy watching. Because he’s doing this thing where he’s reading words on a page or on a teleprompter that it feels like he has never read or thought about. But he’s offering his own color commentary along the way. I want to play a clip from it.
Archived clip of Trump: In just 15 years, Bitcoin has gone from merely an idea posted anonymously on an internet message board to being the ninth most valuable asset anywhere in the world. Can you believe that? Is that right? [Audience cheers.] That’s a big deal! Think of that. It’s already bigger than ExxonMobil. Soon it will be surpassing the entire market cap of silver. It’s not bad. How about gold? How about gold? Let’s go gold. [Audience cheers.]
When I hear this, I don’t hear a lot of conviction in Donald Trump. What I hear is somebody who has been told what an audience wants him to say. He is himself a little bit surprised by what he’s saying, and he’s hearing the crowd.
And just before he came onstage, they had held the fund-raiser. And there was another part where I noticed that he seemed to be kind of freestyling, which came at the end.
Archived clip of Trump: With your help, we will save our nation. We will restore our republic, and we will make America — and Bitcoin — bigger, better, stronger, richer, freer and greater than ever before. [Audience applause.] Thank you all. Have a good time with your Bitcoin and your crypto and everything else that you’re playing with. And we’re going to make that one of the greatest industries on Earth. Good luck and God bless you all. Thank you. God bless you.
This is a very famous final moment. What did the room make of that?
Ending the speech that way made it kind of clear that he didn’t view this as a serious thing. Because you cannot overstate how obsessed with Bitcoin this conference audience is. It’s not something to joke about for them. They were not thrilled.
But that’s just because they’re totally insane. They wanted him to say something like: The dollar will be illegal. It will be only Bitcoins now.
They’re a tough crowd to please.
So I think right now we’re tracking a pretty normal political story. There’s this industry. It’s willing to give a bunch of money to candidates if those candidates support its goals. The candidates want money in order to be able to run their political operations. It’s a pretty normal story.
But then in September 2024, just two months out from the election, the Trump family announced something new: They’re heavily involved in something called World Liberty Financial.
At that point, what did they say World Liberty Financial was?
The Trump sons first started tweeting about it, saying this was the future of finance. And Trump himself said: We’re embracing the future with crypto and leaving the slow and outdated big banks behind.
Reading between the lines, it seemed like they were saying they were going to release some sort of platform for borrowing and lending crypto. There are a million of these. There’s really not some unmet need in the market.
And crypto people, some of the same ones who had been really excited about Trump’s embrace of the industry, were pretty mad. Not everyone, but a lot of people told me: This looks like a cash grab. This isn’t what crypto is about. Some sort of copycat project.
And I thought this was pretty funny because to me it seemed like Trump was catching on to how crypto really works. In crypto, buying other people’s coins is kind of for suckers. By the time you hear about a coin, the insiders have already taken their positions at low prices. You’re what they call exit liquidity. They’re going to sell it to you at a high price. That’s how they make money.
Exit liquidity is such a great name for that.
Yes. The real way to make money in crypto is to make up your own coins and sell them to other people for real money. So, to me, I’m like: OK, it seems like Trump is catching on.
Tell me who’s behind this, though. There’s some involvement of the kids. There’s the son of Steve Witkoff, who later becomes the Middle East envoy.
Who is actually running World Liberty Financial, and how do the Trumps make money off it?
It seemed like there were these two longtime online hustlers who were the real movers behind the project. One of them is Chase Herro.
If you dig into his résumé, it’s a spotty one. He has bragged about dealing weed. He used to sell weight-loss colon cleanses online. He had a $149-a-month-get-rich-quick program. I watched him on Logan Paul’s podcast, where he promoted a crypto coin that later went down 96 percent. And he’s pretty much an unknown in crypto. He had only ever done one cryptocurrency project that I could find. It attracted a few million dollars and then suffered a big hack.
I spent a long time watching all of his YouTube videos, of which there were many. And in one, he called himself the dirtbag of the internet and said that regulators should “kick [expletive]-heads like me out.”
Then he said a quote about crypto that honestly I kind of agree with but makes him kind of an odd business partner. In this video, he’s streaming while he drives his Rolls-Royce, and he says: You can literally sell [expletive] in a can, wrapped in piss —
Archived clip of Chase Herro: Covered in human skin for a billion dollars, if the story is right. Because people will buy it. And that is what is going on in the crypto space. And like I said in my other video, I’m not going to question the right and wrong of all that, all I’m saying is …
His business partner, who’s also helping run World Liberty, Zachary Folkman used to run a service called Date Hotter Girls, where he taught seminars about how to pick up women.
Archived clip of Zachary Folkman: If you want to take her home, tell her about the awesome margaritas that you’re going to make at your place. Tell her about the really sweet balcony you have at your place. Tell her about, you know, some video that you saw on YouTube that you have to show her. And get her home. But the fact of the matter is: This is a very, very succinct way to go out and get consistent results.
Now, the fact of the matter is: Is this flashy? No, not at all. But how many guys came here to learn how to be flashy? OK. How many guys came here to learn how to take girls home and bang them?
So these are the Trumps’ crypto business partners.
I started looking into how this came to be, and it seems like what happened is that Chase Herro and Zachary Folkman had met Steve Witkoff’s son.
Steve Witkoff is a real-estate developer who golfs with Trump. He’s a longtime Trump friend. And Steve Witkoff had introduced them to the Trump sons and Trump Sr. And they had pitched him on this World Liberty plan.
Trump is listed on World Liberty’s website as chief crypto advocate. Eric, Don Jr. and Barron are web3 ambassadors.
This is also par for the course in crypto. They’re not really quite saying exactly what World Liberty is, but they’re going to sell some coins. And the World Liberty coins were, even by crypto standards, a really unappealing investment: If you buy World Liberty crypto coins, you do not receive a share of any money World Liberty makes. You cannot resell them unless the rules change in the future. And the first $30 million of the proceeds will be spent on —
They can’t resell them?
No, they can’t be resold.
How do you make money off them?
Presumably, they’re going to change those rules. But you’re trusting that they do.
So I buy a World Liberty coin, it costs me just notionally, whatever, 30 bucks, 300 bucks. There’s no liquidity in that?
Literally impossible to resell. Maybe you could do it over the counter to your friend with a handshake deal. But you can’t —
I’m actually shocked.
Yes. And after this initial $30 million, 75 percent of all the money World Liberty makes both from operations of whatever they will do in the future and from the token sale — 75 percent is going to be paid to the Trumps as a fee.
OK, but initially it doesn’t make that much money.
Yes, so Trump is not president yet, and this offering is kind of rejected by the crypto industry. At first they had only sold a couple million of the coins. Which is still not bad — you tweet a couple times, you sell a couple million of coins that can’t be resold.
But it hadn’t hit that payout level.
Oh, true.
But then comes Justin Sun. Who is he?
Justin Sun is a controversial crypto billionaire. Born in China, he started a blockchain called Tron, and he is best known for his love of publicity stunts.
He bought lunch with Warren Buffet to try to pitch him about crypto. He bought a seat on one of Jeff Bezos’ spaceships, which I don’t think he ever used. And most recently he bought a piece of conceptual art, a banana taped to a wall, for about $6 million.
So Justin Sun is facing a lawsuit filed by the S.E.C. under Gary Gensler, and he comes in right after the election and buys $30 million of these unresellable World Liberty tokens, which pushes them over the line so that the Trumps would, in fact, receive a payout.
And Sun said at the time to my colleague that he just liked the project. He was not expecting anything from it. But he’s immediately named an adviser to World Liberty, one of maybe 10 people in the industry who are. So now he’s in business with the Trumps, too.
And he says publicly that he has triggered this payout to them. Is that accurate?
He makes a lot of noise about the purchase. And the rules of the game are clear to everyone.
And in case the Trumps did not know about this, just a few weeks later, he goes to a crypto conference in Abu Dhabi, also hosted by Bitcoin Magazine’s David Bailey —
It’s a small world.
Yes. At that conference, he is photographed with Steve Witkoff, the envoy, who also plays a big role at World Liberty. He has now said he divested.
Justin Sun gets in front of him there. We don’t know what was said, but after that, maybe a few weeks later, Justin Sun buys another $45 million of World Liberty’s token —
Which, at this point, is now just doing a 75 percent payout to the Trumps, correct?
Yes, his purchase of World Liberty coins meant that the Trumps were going to get something like $56 million in a payout based on just what he bought.
A few weeks after Justin Sun finished buying his $75 million of World Liberty tokens, his S.E.C. case was put on hold. No explanation was given. The S.E.C. did put a lot of other crypto cases on hold, but this is a very favorable outcome for him and one that is really valuable.
OK, so let’s back up for a minute.
You’ve got a crypto figure. But let’s not call it a crypto figure. You’ve got someone in the finance industry. They are under S.E.C. investigation for fraud. And what they have done is they have found a way to put $56 million publicly and legally in the pocket of the family that is about to — or just has — won the election — and will direct the S.E.C. afterward.
I think somebody listening to this might say: Isn’t that usually illegal? Wouldn’t that be understood under normal law as a bribe?
I guess the question I’m asking you is: Could Justin Sun have just walked up to Eric Trump with a check? Could he have just gone to him and said: Hey, I think you guys are great. I’m into the whole Trump project. I like the branding. I like the aesthetic. I like the vibes. I’m not saying I want anything from you. Here’s $56 million of walking-around money. Would that be legal?
I’m not entirely sure. Maybe it would be. I think that the emoluments clause only applies to payments from foreign governments, but I’m not an expert on this. To me, it seems like this is just not a situation that was ever contemplated by the people who made laws about what presidents could and couldn’t do.
What’s funny is you couldn’t do it for the campaign.
You mentioned earlier that the max you could donate to the campaign directly into some associated official party organs is fairly limited. If you wanted to, say, put $56 million into Trump’s official campaign account, you couldn’t. But you can put it into his crypto coin — which triggers direct payments into his family’s bank accounts.
Yes.
Neat.
And remember the first time around, there was a lot of controversy over people spending money at the Trump Hotel in D.C.
That looks quaint. That was a couple hundred thousand dollars. Now people are sending millions to buy Trump’s coins.
Tens of millions. The thing about the crypto play here is it’s so much more scalable. The number go up.
Yes. And they ended up selling out. They sold all the tokens that they had offered — a total of $550 million worth. So that meant $400 million to the Trumps, based on the terms of the offering as I read them.
Eric Trump has said, “It’s one of the more successful things we’ve ever done.”
Do we know who bought this $550 million of World Liberty coins?
The way crypto works, you can hold your cryptocurrency in an anonymous wallet. You’re only identified by a string of random letters and numbers. So we can go on the blockchain, we can see which anonymous wallets have sent money to buy World Liberty tokens. But we don’t know who those people are unless there are other clues or if the people announce it publicly.
So Justin Sun was a little bit unusual here in that he went and made his purchase very public.
But in theory, there could be somebody else, some financier in Saudi Arabia, some Latin American influence peddler who buys $50 million or $20 million or whatever it is, does not say anything publicly but sends a Signal message to somebody who knows the Trumps, saying: Hey, could you let them know I did this? I’m on their side. I believe in what they’re doing. I want to help out.
For sure. And I mean, you’re giving me an idea. You could save $20 million. Just tell them you did it. You’re like: This is my wallet. [Laughs.]
[Laughs.] Fair enough. So let’s go to a different moment here.
Trump wins the election. Now it’s January 17, three days before Trump will be inaugurated as president for the second time. The Trump family announces a memecoin.
What’s a memecoin? And what is Trump’s memecoin? How does his work?
So crypto totally collapsed in 2022 but has since really recovered.
You might think that maybe it has recovered because they finally came up with a good use for crypto and now it’s actually going to revolutionize finance. But no. The thing that has really been popular in the last couple years in crypto is memecoins — coins that do not claim to ever do anything.
Dogecoin is kind of the original memecoin. It’s just a picture of a dog, and you’re going to buy it because you think other people will buy it and it might go up.
Pure number go up technology. Pure gambling.
Exactly. It’s a new kind of gambling game. It’s kind of like the GameStop bubble on the stock market. It’s like a pump-and-dump scheme, but it’s consensual.
The people involved know what they’re doing: We’re all going to pump up this coin, and we all think we’re the ones who are going to get out at the top before it inevitably collapses.
The only person who’s really guaranteed to make money is the person who created the coin — it costs them nothing — and then anyone that they told about it who’s able to get in in the first minutes when the price is low.
So before Trump, this was mainly something that C-list celebrities did. Caitlyn Jenner, Iggy Azalea, Haliey Welch, who was famous from that “Hawk Tuah” video. They would release memecoins.
And when you buy a memecoin, you’re gambling on: How much attention is this going to get?
Often they only last for hours or a day or two before people start to get cold feet. And the coin collapses. So he announces $TRUMP coin, by far the biggest celebrity to ever do a memecoin. I mean, he’s about to be president. Their price promptly soars up to $72 a coin.
From under 10.
From nothing.
I need to take a second here. I cannot describe how crazy it is that he did this. We were talking about what is and isn’t legal. There are things you don’t do — not because it’s illegal but because the assumption is: It would be so unfathomably politically lethal to engage in corruption of that scale and of that order that — at least I think in the way the framers set up this government — the idea is you’d be impeached immediately.
Certainly in the modern era, the press would be all over you, and it would be just a huge scandal. And you would begin your administration caught up in one of the biggest financial corruption scandals and self-dealing scandals in history.
And this guy, with his bizarre genius for shamelessness, is just doing it all so unbelievably directly. The coin is called $TRUMP. He’s just promoting it himself. It’s all for him. He’s about to become president. He has control of the Republican Party, so they’re not going to do anything to him. And they control Congress.
He sort of overwhelms the system’s capacity to know what to do about him, because it never had any defense for something so over the line that the administration refuses to treat as a problem.
The thing that is supposed to happen in government is somebody says: Hey, you’re taking a bribe. You’re trying to make yourself rich off this.
And he says: Oh, of course I’m not. I would never do that. How dare you impute my integrity.
But Trump is instead like: Yeah, I mean, wouldn’t you?
And you’re like: Oh. [Laughs.]
It’s like: Imagine if, leading up to his inauguration, he lined the National Mall with Trump slots, and these slots had a terrible payout compared to regular slots. It’s ridiculous.
But you could also put a hundred million dollars into one of the machines and let him know you did it. How does he and the family make money off the $TRUMP coin?
Basically, at the beginning of the game, he has one billion coins. They cost him nothing to make, and he’s selling them to people at various prices.
It’s kind of complicated, but I think 200 million coins were sold to the public, and they netted around $300 million. At this point, Trump still has 80 percent of the coins. The price is around $12. So Trump is sitting on about $10 billion worth of his memecoin.
Now if he starts to sell, the price would likely collapse. Also, the way that it’s set up, he’s not allowed to sell for a few months.
Something weird just happened around this coin. There’s a company called Freight Technologies, and they announced openly that they were buying up $20 million of Trump’s memecoin. They said it was “an effective way to advocate for fair, balanced and free trade between Mexico and the U.S.”
Most of the time when people buy meme coins, they don’t think it’s an effective way to advocate for trade between Mexico and the U.S.
So what is a company like that doing, publicly announcing a multimillion dollar investment in the Trump memecoin? What are they saying this memecoin investment is buying them?
It seems like those guys are talking about using it to buy access. But actually there’s a second weird thing that’s happening that’s almost a derivative of this memecoin and crypto boom, where companies on the stock market are realizing that if they start talking about crypto or start saying that they’re buying crypto, investors who are excited by this will drive up their stock price.
But crypto and $TRUMP coin are different. Buying $TRUMP coin is not the same as investing in Bitcoin or Ethereum.
Right. If I were going to meet the president, I’d want to pull out my crypto wallet and show him that I had some $TRUMP coin in it. It seems like an obvious way to get in good with him. And in case he misses the message, he’s having dinner with all these guys.
Tell me about the dinner on May 22. Who gets to be at this dinner? How do you get in?
Over the last few weeks, the Trump memecoin announced a contest. And whoever held the most would get to go to this special dinner at Trump’s golf club outside D.C. And the top 25 got a more private audience. It ended up being that it was going to cost you about $2 million to get in the top 25, and then the top 220 people get in the door for this bigger event. The cutoff ended up being about $50,000 of $TRUMP memecoin to get in the door. So he is auctioning access to the president.
And I guess you could say: Is that really any different? Don’t they do this with bundlers and other kinds of campaign finance donors all the time?
I think he’s been having other dinners with donors where it has cost a million dollars to get into the dinner — things like that.
Other presidents have done things like that, too. And the funny thing with the memecoin is that these recent purchases don’t even necessarily directly benefit him because the vast majority of his profits came from the initial sale.
So does it matter to them if the price of the memecoin goes up and down? In theory, if the price is higher, when they sell further tranches, do they make more money?
Yes. So Trump holds 80 percent of the coins. If he starts selling, he could easily collapse the price.
So if you go buy the $TRUMP memecoin now, and you push the price up a little bit, that is helping Trump when he goes to sell his coins. But he’s not getting the money that you pay for the memecoin now. He has already sold his first tranche, and the rest he’s sitting on.
In a world where he wants to sell, at some point, $100 million more of his own memecoin — because he’s got 800 million of them or whatever it is — it doesn’t seem obvious to me that would push the market down.
But if he has this lever that nobody else has to push the market back up before he sells — or to make it clear to anybody that if they buy in at a big level, they might get to go to the next dinner — this actually does seem like it benefits him.
For sure.
He chooses the moment at which it benefits him. But you have the massive assets in an asset class where the worth of that asset changes, depending on how much people believe buying it will give them access and influence with you. And you put out a big sign saying: Look how much access and influence on me buying a bunch of these will give you. That seems good for the future price of your asset, if and when you decide to sell more of it.
If he wants to unload all $10 billion of Trump memecoin, though, it’s going to take a lot of dinners.
Sure. But you can do it $100 million at a time and that’s not nothing.
True.
Look, I’d like to sell $100 million of a memecoin.
You probably could.
I’d be stoked.
So then in March 2025, the Trump family, through the World Liberty Financial vehicle, announced a new stablecoin called USD1. What is that coin, and how do they make money off it?
A stablecoin is a form of cryptocurrency that’s backed one-to-one with real U.S. dollars. So a stablecoin is always going to be worth a dollar, because in theory you could take that stablecoin to its issuer and exchange it for a real dollar.
There’s another stablecoin called Tether, and it’s so popular that there’s now $150 billion of Tether out there. That company is extremely profitable. The reason this is profitable is because the stablecoins generally don’t pay interest. So if I create 150 billion stablecoins, then I’m sitting on 150 billion real dollars.
I can go stick those in interest-bearing investments and keep that money for myself. You can sort of think of a stablecoin as a bank. So if the Trumps are creating their own stablecoin, USD1, it’s like they’ve created the Bank of Trump. It issues Trump bucks.
If you use USD1, if you buy USD1, it’s like you’re making a big deposit at the Bank of Trump and you’re not receiving any interest. The creators of the stablecoin are the ones who are going to make money on that.
So they create this stablecoin. And then a few weeks ago in Dubai, Zach Witkoff, Steve Witkoff’s son, announced that a fund backed by Abu Dhabi was going to buy $2 billion worth of the Trump stablecoin and use it to make an investment in the crypto platform Binance.
And Zach Witkoff says, “We thank MGX” — which is the name of the fund backed by Abu Dhabi — “and Binance for their trust in us. This is only the beginning.”
How would you describe why a fund backed by Abu Dhabi would want to use the Trump stablecoin as its currency for making this investment?
I wouldn’t actually look at them as the main player here.
CZ — Changpeng Zhao — the owner of Binance, which is the biggest crypto company in the world, was selling part of his company to this Abu Dhabi-backed fund.
Let me tell you a little bit about CZ —
Yes. Because CZ’s situation is not straightforward.
He’s the most successful guy in crypto. His company is worth something like — who knows — a hundred billion dollars. But he was just released from a halfway house in September. He pleaded guilty to failing to take required measures to prevent terrorists, child abusers, entities and sanctioned nations and criminal groups from using his exchange.
Binance was fined $4 billion, and CZ served a short sentence in prison.
In what country?
Here in the U.S.
He’s still running Binance?
He still owns it. As part of the settlement, he stepped down.
OK. So he’s a very central crypto figure. He has just been in jail. There has been a lot of other legal stuff swirling around. The sense that he’s a pretty shady character seems pretty widespread to me.
He is also being sued by the S.E.C. for illegally running a crypto exchange in the U.S.
One of the leaked messages that came out in this case was: Bro, we are running an illegal crypto exchange in the U.S.
[Laughs.] Something like that. It looks really bad.
So if we go back to December, right after Trump’s win, CZ was also at that Bitcoin conference in Abu Dhabi hosted with David Bailey. And I’ve reported that he met with Steve Witkoff there — Trump’s envoy who played an important role at World Liberty. And after that meeting, World Liberty and Binance began talking about some sort of business deal. We don’t know the details. CZ afterward tweeted that it was fake news.
CZ has also been pushing for a presidential pardon. So this Abu Dhabi-backed fund was going to give CZ $2 billion. Now CZ can do anything with that $2 billion that he wants. And what this announcement is saying is that CZ is going to put that $2 billion in USD1 — in the Bank of Trump.
And that’s enough that World Liberty could quite easily earn $50 million a year in interest. As we know, the terms of World Liberty dictate that whatever they do earn, the Trumps will get three-quarters. So as long as CZ keeps his money in USD1, the Trumps are earning interest on this.
And he’s pushing for a pardon.
It’s like muzzle velocity for political corruption here.
There are so many stories that, on their own, seem like they should be era-defining political scandals. But the big picture that I see emerging when I track this story — from Trump trading cards, where he looks like a firefighter or whatever, all the way to the Trump stablecoin, Trump media launching E.T.F.s — is that the Trump family has been groping its way, evolving, learning how to open up a lot of avenues to let people invest in various crypto schemes of theirs.
For a long time, we’ve known crypto is used for drug deals. We’ve known it is used on the black markets. We’ve known it is used for things that you don’t want to see regulated. And they seem to me to have figured out another very obvious use case, which is that you can do forms of payoffs that would be regulated if you tried to do them with the Trump campaign. But you can do them with crypto, and you can have all kinds of foreign figures do it. It’s very Wild West compared to other things in the U.S. financial system. And they’re just making hundreds of millions of dollars — maybe over time billions of dollars — from this.
It all looks astonishingly corrupt to me. Am I wrong? Can you give me an exculpatory version of this?
I think what the Trumps have said about it is: We can’t be bought.
They can’t deny that people are giving them money, but their claim is that they are still acting in what they believe to be the U.S.’s best interest. But the conflicts of interest are so obvious.
Right now, Congress is debating stablecoin regulation. Is it going to be favorable to the president’s coin? Would people in his party want to pass rules that would be bad for the president’s coin? It seems unlikely.
Since memecoins really took off recently, the rules around them were not clear. Is Trump’s S.E.C. going to pass a rule saying: Oh, actually this is an illegal offering — you can’t do that? It would be pretty hard for them to do that with the president having just done a big memecoin offering.
And in fact, once Trump’s appointees took over at the S.E.C., they announced that memecoins were collectibles, like Beanie Babies, and that the rules did not apply.
One way you could look at this is to say: This is maybe a little bit more baldfaced, but it’s just the kind of political corruption we see all the time. You have Hunter Biden serving on Ukrainian energy boards and getting payouts. This is an old thing where the family members of the president seem to get sweetheart deals and seem to sell things at inflated prices.
But this feels different to me, both because of the sums involved —
I think that the scale is so different that it’s a different thing.
Yes.
Hunter Biden should not be taking advantage of his being the president’s son to sell his terrible art to mystery buyers for hundreds of thousands of dollars. But how much juice with Joe Biden is that going to buy you?
This is Trump himself making hundreds of millions of dollars. It’s hard to believe that would not influence him.
But the number is so big. And then there’s this other dynamic here, which is that the regulation around the industry is completely unformed. So this is not like other industries where we have structured regulations around the energy industry, around most of the financial industry. If you want to get into equities, we have a structured regulatory architecture for that.
Here, it’s all Wild West. The crypto industry has been trying to win over the Trump administration. And now it’s not just that the Trump administration is getting campaign donations from the crypto industry, it’s that they have directly invested themselves, their family and their revenue streams.
As Eric Trump said: One of the most successful things that the Trump family has ever done now depends on this extremely lax regulatory architecture continuing.
And by the way, it also depends on very lax political corruption laws around this in a way that doesn’t exist for other forms of potential payouts.
I’ll give you an example that I think is pretty significant.
In “Number Go Up,” I was investigating the use of stablecoins — before Trump’s coin — and found that stablecoins were fueling this epidemic of scams, where Americans were being catfished by spam messages, tricked into sending money for cryptocurrency investing schemes and then sending huge amounts of money through stablecoins overseas where it would never be seen again.
And on the other end of that, in Southeast Asia there are huge compounds where tens of thousands of people are forced to work as scammers under threat of torture or worse, and are spending all day sending these spam messages and trying to trick people.
Stablecoins enable this because —
This is stuff where you get the message, and it’s like: Hey, didn’t we have plans to go to dinner tonight?
Right. I went to Cambodia to investigate this, and there are stores all over the place where you can walk in, anonymously transfer your stablecoins and walk out with a brick of cash. If the scammers were using Visa or Mastercard or bank wires, this would be much harder. It would never have reached the scale that it has.
Estimates are that Americans are losing tens of billions of dollars to these types of crypto scams. You could imagine a stablecoin regulation that would require more of the same kind of “know your customer” anti-money laundering rules that apply to PayPal, Visa or Mastercard.
But is that going to happen when it would disadvantage the president’s World Liberty start-up?
So these are real things that are being debated right now.
How do all the crypto idealists feel about where this is going? The people who thought we’d have this leaderless, decentralized, borderless world where money worked completely differently, where the returns to being powerful and influential and connected began to dissolve?
There was a real utopian strain in all this for a very long time. When they see it going in this direction, are there people who are sad about it?
Those people, by and large, are long gone. And the industry now — sure, there are some people who are criticizing Trump’s crypto ventures. But mostly they’re just really psyched that the industry is being deregulated and number go up.
Do you have a ballpark estimate at this point on how much the Trump family seems to have made off crypto?
At least $700 million.
Oh, that’s not small. [Laughs.] It’s a lot of money.
Trump is maybe worth $4 or $5 billion. What do people think now?
People have argued about this for a long time.
However rich he is, it’s not nothing.
I think that is a good place to end. So also our final question: What are three books you’d recommend to the audience?
One book I’ve been reading recently that I really love is called “A Distant Mirror: The Calamitous 14th Century” by Barbara W. Tuchman. It’s about France in the 14th century but during the Hundred Years’ War, after the Black Plague.
But what really stands out to me is that it really makes history weird. You realize: These people’s lives were not like our lives. Ordinary people’s lives were very different. And they saw the world in a totally different way than we do. They had just seen humanity almost wiped out by a plague that they didn’t understand.
Another one I’ve liked recently was “Nixonland” by Rick Perlstein. It’s sort of like reading the newspaper every day, but during the Nixon years. And you have the benefit of hindsight and all sorts of Oval Office tapes. Perlstein has got a great eye for detail.
Then a novel I really liked recently is called “Gretel and the Great War” by Adam Sachs. It’s a collection of interconnected fables set in early 20th century Vienna. It’s like a literary puzzle — really inventive, very original, but also a portrait of Jewish Europe before the rise of Nazism. It was really funny.
Full disclosure: I’ve admired his writing since we were children, and I kind of owe him one for talking him into doing something really dumb in high school.
Zeke Faux, thank you very much.
Thanks, Ezra.
You can listen to this conversation by following “The Ezra Klein Show” on NYT Audio App, Apple, Spotify, Amazon Music, YouTube, iHeartRadio or wherever you get your podcasts. View a list of book recommendations from our guests here.
This episode of “The Ezra Klein Show” was produced by Annie Galvin. Fact-checking by Michelle Harris, with Mary Marge Locker and Kate Sinclair. Our senior engineer is Jeff Geld, with additional mixing by Aman Sahota. Our executive producer is Claire Gordon. The show’s production team also includes Marie Cascione, Rollin Hu, Elias Isquith, Marina King, Jan Kobal, Kristin Lin and Jack McCordick. Original music by Pat McCusker. Audience strategy by Kristina Samulewski and Shannon Busta. The director of New York Times Opinion Audio is Annie-Rose Strasser. And special thanks to Richard Painter
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Ezra Klein joined Opinion in 2021. Previously, he was the founder, editor in chief and then editor at large of Vox; the host of the podcast “The Ezra Klein Show”; and the author of “Why We’re Polarized.” Before that, he was a columnist and editor at The Washington Post, where he founded and led the Wonkblog vertical. He is on Threads.
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