Molly White's Citation Needed - Issue 83 – Trump’s crypto-backed plan to auction off access to the White House

Episode Date: May 12, 2025

Trump’s crypto conflicts continue to multiply as Democratic legislators demand ethics inquiries and block industry-backed bills. Originally published on May 12, 2025.

I'm Molly White, and you're listening to the audio feed for the citation-needed newsletter. You can see the text version of the newsletter online at citation-needed.news. Issue 83. Auctioning off access. Trump's crypto conflicts continue to multiply as Democratic legislators demand ethics inquiries and block industry-backed bills. This issue was originally published on May 12, 2025. President Trump's cryptocurrency-based.

self-enrichment continued this week with a $1.5 million per plate crypto fundraiser, a $2 billion UAE investment deal using Trump's new stable coin, and a naked attempt at influence buying by a transportation company through Trump's meme coin. Three major crypto schemes in a single week underscore how aggressively Trump is leveraging the presidency for a legal personal gain. The blatant corruption is beginning to incur some political consequences. and Senator Richard Blumenthal, a Democrat from Connecticut, has opened a preliminary investigation by the Senate Homeland Security Permanent Subcommittee on Investigations into Trump's World Liberty Financial

and meme coin projects. Letters are flying out of Democratic Congress people, demanding information from various Trump businesses and crypto connections. And even some Trump allies and staunch crypto advocates like Senator Cynthia Lummis have been forced to admit that Trump's crypto activities, quote, give her pause. In the White House. After dismissing as Fudd, the Wall Street Journal's report that he was seeking a pardon,

former Binance CEO Cheng Peng Zhao is seeking a pardon. He served four months in prison after pleading guilty to Bank Secrecy Act violations pertaining to Binance's lacking anti-money laundering program. Trump business interests. Trump's crypto-related conflicts are only growing, and on May 5th, the president hosted a one-lawful. $1.5 million a plate, quote, crypto and AI innovators fundraising dinner, benefiting the MAGA Inc. SuperPack. The dinner, featuring the Trump administration's crypto and AI czar, David Sacks, as a special

guest, is distinct from the May 22nd dinner for the top 220 buyers of Trump's meme coin. While MAGA Inc. is a single candidate SuperPack, the purpose of its fundraising now that he's in office is unclear. The SuperPack's website hasn't been updated. since the election, still stating that the committee's, quote, mission is to ensure a second Trump administration and to promote America first candidates. Despite the somewhat broad mission, the SuperPAC only spent money to support Trump last election. As a second term president, Trump is constitutionally prohibited from seeking a third term, though this hasn't stopped him from musing about possible ways to do so, and the Trump organization recently began selling a Trump-2020 hat and, quote, rewrite the rules

merchandise. Regarding the meme coin dinner, Democratic senators Adam Schiff from California and Elizabeth Warren from Massachusetts have demanded the Office of Government Ethics open a probe into the stunt. The OGE is currently headed by acting director and Trump loyalist Jameson Greer. Another group of Democratic senators, including Warren, Van Hollen from Maryland, and Blumenthal from Connecticut, have demanded answers from Treasury Secretary Scott Bessent and Attorney General Pam Bondi about Trump's business connections to finance and Binance's regulatory compliance. Separately, Senator Blumenthal, the ranking member of the Senate Homeland Security Permanent Subcommittee on Investigations, announced a preliminary inquiry into quote Trump's crypto-backed plan to auction off access to the White House. He sent letters to

Fight, Fight, Fight, Flight, LLC, one of the entities behind the Trump meme coin, and World Liberty financial, requesting communications records and other information. Preliminary inquiries can include interviews, subpoenas, and depositions, and are concluded with a committee vote to dismiss the matter or the opening of an adjudicatory review. On stage in Dubai with shady crypto billionaire Justin Sun, President Trump's son Eric and World Liberty Financial co-founder Zach Whitkoff announced that the state-backed Emirati investment firm, MGX, would be taking a $2 billion stake in the Biden. cryptocurrency exchange, using the World Liberty issued USD1 stablecoin to complete the transaction.

USD1 is a brand new stablecoin, and there's little reason to use the unproven token over a traditional financial transfer or more established stablecoin other than to cozy up to the Trump's. World Liberty Financial, the Trump venture that issues USD1, profits from deals like this by earning yield on the stable coin's backing assets, which function essentially as an interest-free loan to the Trump's. Quote, virtually every detail of the announcement contained a conflict of interest, observed the New York Times. Texas Transportation firm Freight Technologies Inc. said the quiet part out loud when they announced that they would issue bonds to fund the acquisition of up to $20 million in the Trump meme coin as a, quote, effective way to advocate for fair, balanced, and free trade between Mexico and the United States.

The Trump meme coin social media account amplified the press release. Federal bribery statutes prohibit the president from accepting payments for influence over official acts. Trump's truth social platform told shareholders they are, quote, exploring the introduction of a utility token with a truth digital wallet that can initially be used for truth plus subscription costs and later be applied to other people. products and services in the truth ecosphere. This follows announcements that they plan to partner with crypto.com to launch a series of crypto and traditional asset-based ETFs. Trump owns a majority stake in the company, which forms a substantial part of his personal fortune, at least on paper.

Movement Labs, a crypto platform backed by Trump's World Liberty Financial, is embroiled in scandal after co-founder Rushi Manche made secret shady deals with market makers that, ultimately allowed an outside party to dump $38 million in tokens on retail investors. The blow up resulted in Binance delisting the MOVE token and banning a related market maker, movement firing Manche, and the company quickly establishing a new company called MOVE Industries in hope of making a, quote, clean break from the disaster. World Liberty's token swap deals with Movement and other crypto firms had already been controversial, with allegations of insider trading and quid pro quo deals.

Having just created the American Bitcoin Company through a sweetheart deal with Hutt 8, Trump's son's company will now merge with Griffin Digital Mining to go public. In the courts, Alex Mishinsky has been sentenced to 12 years in prison for his Celsius fraud, which culminated in the mid-2020 collapse of the U.S.-based cryptocurrency lending firm, causing over half a billion dollars in customer losses. The government had requested a 20-year sentence. Mishinsky asked for just a single year of imprisonment. Mishinsky pleaded guilty to fraud in December,

just before his case was set to go to trial, and that plea was a major factor in his receiving a substantially shorter sentence than Sam-Bankman-Fried's 25 years. Avi Eisenberg has been sentenced to four years and four months in prison for possession of child sexual abuse material, a crime that was discovered during a law enforcement search of his devices while investigating his $110 million exploit of the Mango Market's cryptocurrency platform. The judge declined to impose a sentence for the crypto crime, citing the defense's request for an acquittal or retrial, but noted that the majority of Eisenberg's sentence would

likely stem from the CSAM conviction regardless. The criminal trial against former Safe Moon CEO, John Coroni has begun in the Eastern District of New York, with prosecutors already launching into key testimony from cooperating witness and former Safe Moon CTO Thomas Papa Smith. Smith was the second of three executives charged in November 20203 with conspiracy to commit securities fraud, wire fraud, and money laundering, and he pleaded guilty. The third executive, Kyle Nagy, is still in the wind.

Coroni argues that because Safe Moon investors could theoretically, have traced public blockchain transactions to observe that he and others were draining money from the liquidity pools, it wasn't fraud, despite their representations that the pool was locked. For detailed coverage, David Z. Morris is there in person covering the trial for Proto's, his dark markets newsletter, and on social media. Alexander Gurevich, accused of crafting the August 2022 exploit that enabled a $190 million theft from the Nomad Bridge, has been arrested in Israel and is in the process of being extradited to the United States. Although Gurevich was the first to identify the vulnerability, he's only accused of stealing

about $3 million. The remaining amount was stolen in a mad scramble of copycats replicating his exploit. He was reportedly arrested at the Tel Aviv airport en route to Russia, where he has dual citizenship, and was attempting to travel under a different identity after changing his name the prior week. Shaquille O'Neal has agreed to an undisclosed settlement with FTX investors over his promotion of the collapsed exchange, ending a saga that I can thank for several months of entertainment back in 2023, as one of the physically largest men in the world managed to hide from process servers. Samurai Wallet Prosecutors who filed charges a year ago against the operators of Samurai Wallet

have joined the defense in requesting a pause in the case, quote, while the government determines its position on a request to dismiss the case based on Deputy Attorney General Todd Blanch's memorandum on ending regulation by prosecution. The memo directed the Justice Department, quote, not to charge regulatory violations in cases involving digital assets, unless there is evidence that the defendant knew of the licensing or registration requirement at issue and violated such a requirement willfully. The Samurai Wallet defendants are charged with conspiracy to operate an unlicensed money transmitting business, one of the violations Blanche instructed prosecutors not to charge, but also with money laundering conspiracy.

After the joint request, the defense also submitted a letter accusing prosecutors of improperly suppressing evidence that, quote, senior representatives at FinCEN believed samurai wallet didn't function as a money services business. Quote, it's hard to imagine a clearer example of regulation by prosecution than what we have here. The relevant regulator telling the prosecutors that samurai wallet was not a money transmitter, under the same public guidance that Mr. Rodriguez and Mr. Hill relied on to guide their conduct, and the prosecutors going ahead and indicting them for operating an unlicensed money services business anyway, wrote the defense team. They have asked the judge to hold a hearing regarding the late disclosure, which they argue was a Brady violation that could have

influence the magistrate judge's bail determinations and Judge Berman's decision not to allow the defendants to file a motion to dismiss immediately after their arraignment. The government replied to characterize the call described in the disclosure as merely, quote, FinCEN employees expressing their individual, informal, and caveated opinion, writing that, quote, the individual employees of FinCEN were not speaking on behalf of FinCEN, they were not providing FinCEN's opinion, and they, quote, did not have a sense of what FinCEN would decide if this question were presented to their FinCen policy committee. Prosecutors also argue that the evidence was provided in a sufficiently timely fashion for the defense team to use in the trial, which is not scheduled for another seven months.

In regulators, the CFTC has dropped its appeal of a September 2024 decision that found the regulator had overstepped when they blocked Kalshi, a non-cryptop-based prediction markets company, from offering betting markets on U.S. elections. President Trump's son, Donald Trump Jr., joined Kalshi as a senior advisor in January 2025. FinCEN has designated the Cambodian Way One Marketplace and Payment Services provider a, quote, primary money laundering concern. Last year, blockchain research firm Eliptic reported that the firm enabled romance scams and other illicit activity. The Treasury Department seems to agree, with Treasury Secretary Scott Besant, adding that, quote, Wei one group has established itself as the marketplace of choice for malicious cyber

actors like the DPRK and criminal syndicates who have stolen billions of dollars from everyday Americans. SEC. The cryptocurrency lending platform NXO exited the United States in 2022, amid increased scrutiny from regulators towards crypto lending firms in general, following the catastrophic collapse of companies including Celsius, BlockFi, and Voyager. The firm faced significant regulatory actions in the United States, including from the Securities and Exchange Commission, Consumer Financial Protection Bureau, and eight state regulators.

Nexo ultimately settled with the SEC and state regulators for $45 million in January 2023. Now, with the SEC defanged, Nexo is ready to make its comeback. At an event, Nexo hosted in its native Bulgaria, titled Trump, Business Vision 2025 and featuring Donald Trump Jr. as a headline speaker, NXO announced their return to the United States for both retail and institutional investors with, quote, high-yield crypto savings accounts, asset-backed credit lines, advanced trading, and institutional-grade liquidity solutions. They added, quote, thanks to the vision and leadership of President Donald J. Trump, his administration,

and his family, the United States is once again a place where innovation is changed. championed, not stifled. Nexo is only one of several cryptocurrency lenders returning to the business after the SEC cracked down on the practice. Coinbase reopened its lending product in January, before Trump even took office, offering retail customers' loans against their Bitcoin and suggesting using them to pay mortgages or buy cars. Bitcoin payments app Strike has also recently launched a lending product, shocking some with predatory loan terms, combining a 12% interest rate, two times collateralization, and the high risk of liquidation if the notoriously volatile assets price dips. When asked if strike re-hypothicates the collateral, that is, relens the

assets taken as collateral, a practice that is contributed to crypto meltdowns in the past, strike CEO Jack Mallors was KG, claiming the company statements suggesting rehypothication were, quote, more of a legal technicality than operational reality. In other words, don't worry that our terms allow us to engage in high-risk lending practices, we pinky swear we won't. Adding to a long list of dropped lawsuits and investigations, the SEC has closed an investigation into PayPal's stablecoin offering, PiUSD. The agency had previously issued a subpoena to PayPal regarding the stable coin in November 2023. In Congress, Genius Act. The Genius Act Stablecoin Bill has failed, for now, to advance in the Senate after all Democrats and two Republicans

voted against it. The bill seeks to establish a regulatory framework for stablecoins, defining the entities permitted to issue them, establishing registration paths, and outlining oversight requirements. Critics raised concerns that the bill doesn't adequately prevent money laundering, ensure consumer protections, restrict tech megagrients from expanding existing monopolies into the banking sector, or limit contagion risk to the financial system. Democratic opposition to the bill dramatically intensified after Trump's World Liberty Financial announced the launch of its USD1 stablecoin, then announced it would be the vehicle for the $2 billion MGX finance transaction. Senator Merkley, a Democrat from Oregon, and 18 other senators, including Crypto Advocates and

Genius Act co-sponsors Jillibrand, a Democrat from New York, and Alcibrook, a Democrat from Maryland, introduced the End CryptoCorruption Act to prohibit the president, Congresspeople, and other officials from issuing, sponsoring, or endorsing cryptocurrencies, including stablecoins or meme coins. I have to say, it seems wild to me to acknowledge that Trump is abusing his office in blatantly corrupt ways and respond by introducing a bill to chip away at the types of corruption he's engaging in, rather than addressing it directly through impeachment. Some Democrats cited corruption as their reason for opposing the bill. Others, like crypto-backed Ruben Gallego, a Democrat from Arizona, said they merely opposed it because the vote was premature,

and they hadn't reviewed a final version with Democrat negotiated amendments. The two Republicans who voted against the bill were Josh Hawley, from Missouri, and Rand Paul from Kentucky. Holly said he wanted prohibitions against big tech firms issuing stable coins. Paul's concerns were rooted in fear. that the regulations might stifle the crypto industry. Majority leader John Thune, a Republican from South Dakota, switched his vote to oppose the bill for procedural reasons, allowing him to reintroduce it later.

Republicans were furious at the bill's failure, with Banking Committee Chair Tim Scott, a Republican from South Carolina, threatening, quote, painful political consequences for the Democratic senators. Senator Bill Hagerty, a Republican from Tennessee, accused Democrats of, quote, unilaterally seeding American leadership capability in the digital asset industry to the CCP because they fear the far-left radicals of their party.

House Opposition In the House, Democrats led by Maxine Waters from California blocked a hearing on digital assets and the Fit 21 Crypto Market Structure Bill, instead opting to convene their own discussion about President Trump's crypto conflicts of interest. Waters demanded a change to the legislation to prevent presidents, and Congresspeople from owning cryptocurrency firms or cryptocurrencies themselves. Representative Torres has separately announced he plans to introduce a bill titled the, quote, Stop Presidential Profiteering from Digital Assets Act.

In the States, Arizona Governor Katie Hobbs vetoed SB 1025, a bill that narrowly passed the state legislature, allowing the state's retirement fund to invest up to 10% of their funds into crypto assets. Quote, Arizona's retirement funds are not the place for the state to try untested investments like virtual currency, she wrote in a brief statement. However, days later, she signed HB 2749, establishing a, quote, Bitcoin Reserve Fund, made up of abandoned digital assets that have gone unclaimed after three years. The bill does not permit additional digital asset purchases. New Hampshire has approved a bill allowing up to 5% of public funds to be invested.

invested in major cryptocurrencies, setting a size threshold that currently would only allow Bitcoin investments. Both state bills passed with heavy lobbying from the Satoshi Action Fund, which also thanked Coinbase in Arizona for, quote, showing up twice to advocate for its passage. These two bills are only a part of the massive crypto industry lobbying push for states to embrace crypto, often with substantial investment of state funds. Outside the U.S. Some European banking officials are growing increasingly concerned about cryptocurrency's rapidly expanding role in the U.S., with the government of the Bank of Finland, Ali Rain, commenting that he is, quote,

quite concerned about the possible mainstreaming of crypto assets in the U.S. A Bank of Italy report noted the Trump administration's pivot on crypto policy, opining that, quote, if these investments were to become more closely entwined with the traditional financial system, there could be greater vulnerabilities for markets and intermediaries, and the threat of, quote, risks not only for investors, but also potentially for financial stability. Elsewhere, however, Trump's activities are serving as more of a blueprint. In South Korea, the right-wing People Power Party announced support for changes to end a, quote, era of uncertainty and regulation around digital assets, and to promote the crypto sector,

describing the status quo in the country as, quote, an excessive regulation. focused policy. EXCH, a no-Ky-C-cry cryptocurrency exchange used by North Korean cybercriminals to launder some of the proceeds of the $1.5 billion by-bit hack, has shut down. The project left a message on April 17, explaining that, quote, recently, we received confirmation of information that our project is the subject of an active transatlantic operation aimed at forcibly shutting our project down and prosecuting us for, quote, money laundering and terrorism. They added that, quote, the majority of us voted to cease and retreat instead of going

against strong wins, because none of us want to cause any harm to innocent people. On April 30th, the day before the platform's pre-announced shutdown date, German police seized the platform's German infrastructure, data, and crypto assets priced at around $38.2 million. The Web 3 is going just great recap. There were five entries between April 25th and May 11th. averaging 0.3 entries per day. $357.1 million were added to the Grift counter. The founder of the Zirabro token faked his death, promoting a new legacy coin. BitGet accused a, quote, professional arbitrage group of profiting $20 million from voxel

market manipulation. $330 million in Bitcoin was apparently stolen, and the laundering spiked them a narrow price by over 40%. term finance lost $1.65 million due to a misconfiguration, but recovered $1 million of it, and loop scale was hacked for $5.8 million only two weeks after its launch. Worth a read. Joel Colleen at Wired has been doing a great job of keeping up with Trump's cryptographs, and this recent article features expert commentary on the clear ethics violations as well as the regulatory status of his meme coin. It's titled Trump's Quest for Crypto Riches is a constitutional scandal waiting to happen. Slate gives an update on the Trump administration's efforts

to dismantle the Institute of Museum and Library Services. The good news is that they've hit roadblocks in the courts, where temporary restraining orders and injunctions have stymied this devastating move. The bad news is that things are likely to get worse, with future library funding in serious question. It's never been more important to fight for our libraries. This piece is titled even George W. Bush liked libraries. In the news, I joined Amy Goodman on Democracy Now to discuss my April 17 article on Trump's newest Grift, building a cryptocurrency empire while destroying its regulators. That segment is titled Trump's Newest Grift, Molly White on First Families' Cryptocurrency Empire and gutting of regulations. I also joined a panel on the Trump administration's crypto policy,

along with law professors Richard Painter and Tanya Evans, and policy expert and lecturing fellow Lee Reiner's. That was on the agenda, and it was titled, What Does the U.S. gain from Trump's crypto policies? I spoke to the Washington Post about acting U.S. attorney for the District of Columbia Ed Martin's letter to the Wikimedia Foundation, where he bumpuously attempted to threaten the WMF's tax-exempt status. The letter levels accusations that primarily demonstrate Martin's severe lack of understanding,

of how Wikimedia works, not to mention the lack of understanding of the First Amendment and who has authority over a non-profits tax status. The good news is that Ed Martin is since out as DC U.S. attorney. The bad news is that his replacement may well be worse. Finally, NBC News, The Hill, and the American prospect have all cited my recent work in their reporting on Trump's crypto activities. That's all for now, folks. Until next time, this has been Molly White. Thanks for listening to this issue of the citation needed newsletter. If you would like to support my work with a free or pay what you want subscription to the citation needed newsletter, or if you would like to receive these issues in your email, go to citation needed.news.

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