In a new letter, Democratic lawmakers are asking federal regulators to look into legal and ethical questions around the meme cryptocurrency coins launched by President Donald Trump and the first lady.
The letter formally raises concerns about the risk of foreign countries trying to curry influence by buying the coins — and the ethics of Trump making “extraordinary profits off his presidency.”
Sen. Elizabeth Warren, the top Democrat on the Senate Banking Committee and an advocate for crypto regulation, co-wrote the letter with Rep. Jake Auchincloss, D-Mass., who sits on the House Committee on Energy and Commerce.
Warren and Auchincloss point to the foreign emoluments clause of the U.S. Constitution, which states “[N]o Person holding any Office of Profit or Trust under [the United States], shall, without the Consent of the Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State.”
“Anyone, including the leaders of hostile nations, can covertly buy these coins, raising the specter of uninhibited and untraceable foreign influence over the President of the United States, all while President Trump’s supporters are left to shoulder the risk of investing in $TRUMP and $MELANIA,” Warren and Auchincloss wrote to the Office of Government Ethics, the Treasury Department, the Commodity Futures Trading Commission and the Securities and Exchange Commission.
The meme coins also pose a conflict of interest, they write, because Trump’s family members are expected to directly profit off an industry he is charged with regulating. The president nominates the Chairs of the Commodity Futures Trading Commission, and Securities and Exchange Commission, the Directors of the Financial Crimes Enforcement Network and Consumer Financial Protection Bureau, and the Secretary of the Treasury.
“This creates an unavoidable conflict of interest, as he will be in a position to both benefit directly from the sale of the tokens while also setting the policy on how these markets are regulated. He will be in a position to seek commitments from agency heads, to not only decide how the market is valued, but to implement lax policies to crack down on crypto scams like pump-and-dump schemes that are regularly conducted through meme coins,” the letter says.
ABC News reached out to the White House for comment.
Trump launched the $TRUMP coin Friday night, just days before he took office. Its estimated value is now $7 billion, according to CoinGecko. The $MELANIA coin is worth around $400 million. A big share of the profits from these coins go toward Trump and his businesses, according to financial disclosures. (If Trump divests of his interests in these companies like he did with most of his assets during his first term, his family could still profit off them.)
Meme coins are a highly volatile type of cryptocurrency that allow people to bet on a popular personality or trend.
On Thursday, Trump signed an executive order seeking to support the expansion of cryptocurrencies.
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