On January 17, at the lavish Crypto Ball, just a few blocks from the White House, a host of the most powerful CEOs in the U.S. cryptocurrency industry gathered to celebrate President Trump's upcoming inauguration.

The "Make Bitcoin Great Again" hats blend with evening gowns and luxurious vests. They raise their glasses to celebrate the bright future of the cryptocurrency industry under the leadership of a new administration, committed to promoting the interests of this sector.

But just a few hours later, the festive atmosphere was disrupted by a surprising announcement from President Trump. At exactly 9 PM, he announced on social media that he would launch a new cryptocurrency. It was the $Trump coin, a type of "memecoin" that is often more humorous than of real value.

Alienating a number of cryptocurrency CEOs

This announcement quickly sparked a series of ethical and legal controversies, as Mr. Trump leveraged his power and fame to market a volatile and speculative digital asset to millions of followers.

While some retail investors welcomed the news, many industry leaders condemned this action as a reckless money-making opportunity, undermining the credibility of the entire cryptocurrency sector.

The announcement of a cryptocurrency from Trump unexpectedly appeared on social media while many cryptocurrency CEOs were attending a pre-inauguration festival. Photo: New York Times.

According to analysis from Chainalysis, most buyers of the Trump coin are inexperienced retail investors, likely participating in the cryptocurrency market for the first time. The report indicates that although these traders are "almost breaking even," over 100,000 have incurred losses.

However, this move brought enormous profits to the Trump family. In less than a day, the launch of the $Trump coin generated transaction fees of up to $58 million. Nevertheless, the value of the $Trump coin had fallen 60% from its peak of $29 to a significantly lower level, risking further decline if the Trump family decided to "pull the rug" (rug pull). This is a form of rapid liquidation to realize profits.

When asked about this currency at the White House, Mr. Trump appeared indifferent: "I don't know much about it." But after the inauguration, he continued to share the initial announcement about the $Trump coin. This is seen as a way to encourage more buyers despite its value having significantly dropped, the New York Times noted.

Leaders in the blockchain industry who once supported Mr. Trump are now openly expressing their disappointment. Nic Carter, founder of the investment fund Castle Island Ventures, was present at the event when the Trump coin was announced. He expressed: "This makes the entire industry look like a scam, full of greed and self-interest."

Ryan Selkis, a cryptocurrency entrepreneur and Trump supporter, commented on social media that the issuance of this memecoin would cause the Trump administration to lose "a lot of money and goodwill." "Trump needs to fire his cryptocurrency advisors, top to bottom, and replace them with people who know what they are doing," wrote Gabor Gurbacs, another director, bluntly on X (formerly Twitter).



"Blatant money-making scheme" of the Trump family

According to the New York Times, the launch event for the $Trump coin is not the first time the Trump family has ventured into the digital asset space.

Previously, in 2022, his family had partnered with an entrepreneur known for bizarre business projects, Bill Zanker, to sell digital trading cards worth $99 depicting Mr. Trump as a superhero. These cards are a form of NFT (non-fungible token) and are seen more as collectibles than investment assets.

But the $Trump coin was different. It quickly attracted attention from the speculative community, similar to how the GameStop meme stock stirred the financial market. Some traders like Josh Bailey (Texas) quickly joined the game. Right after Trump's announcement, Bailey invested $12,000 in the $Trump coin and made a profit five times in less than a day.

However, as the market began to adjust, slower buyers suffered heavy losses. An anonymous investor, using the nickname Ansem, lost $2 million just two hours after the coin's value declined.

The current situation is very complex, as Mr. Trump is appointing officials to financial regulatory agencies, including the SEC.

By the afternoon of the second day, First Lady Melania Trump also announced the launch of her own cryptocurrency. $Melania became a direct competitor to $Trump. As a result, the value of $Trump dropped another 60%, leaving many investors empty-handed.

Industry experts believe that the issuance of these two memecoins is merely a "blatant money-making scheme." Additionally, it raises legal questions about whether the $Trump and $Melania coins are securities. If so, do they comply with federal regulations on registration and transparency?

Meanwhile, the Trump family asserts that these tokens are "just digital collectibles," not designed to be investment opportunities. However, the trading behavior of investors indicates otherwise. Most are participating with the goal of quick profits.

Senator Elizabeth Warren and other Democrats have called for federal agencies to investigate the matter. However, any investigation would touch on the family of a sitting president, who has just appointed a new chairman for the Securities and Exchange Commission (SEC).

Under U.S. law, digital assets can be considered securities if marketed as an investment opportunity. Therefore, they must adhere to public regulations and registration. During President Biden's term, the SEC has pursued several lawsuits against crypto companies for this reason.

However, David Sacks - a venture capitalist appointed by Trump to oversee the new administration's technology policy - believes this memecoin is "like a baseball card or a stamp" and "can be sold entirely."

In an interview, President Trump's second son Eric Trump dismissed all criticisms. He asserted: "The $Trump coin and World Liberty Financial are the two most successful projects in the history of cryptocurrency."