Molly White's Citation Needed - Trump’s newest grift: Building a cryptocurrency empire while destroying its regulators

Episode Date: April 17, 2025

Inside the Trump family’s sprawling crypto empire — from memecoins to mining — and how Trump is using presidential power to dismantle the regulators who could stop it. Originally published April 17, 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. Trump's newest grift, building a cryptocurrency empire while destroying its regulators. Inside the Trump family's sprawling crypto empire, from meme coins to mining, and how Trump is using presidential power to dismantle the regulators who could stop it. This issue was originally published on April 17, 2025. In an unprecedented abuse of presidential power, Donald Trump is dismantling federal cryptocurrency oversight while building a sprawling family crypto empire worth billions.

Through World Liberty Financial, a planned decentralized finance platform that also recently announced its own stable coin, the Trump family is positioning to profit from cryptocurrency lending and trading. Through truth.fi, they seek direct exposure to Bitcoin and profits from hawking investment products to Trump's most loyal base. Through a new Bitcoin mining venture, they're gaining control over crypto infrastructure and expanding exposure to assets that Trump himself can influence from the White House. And through a series of meme coins, NFTs, and even a planned crypto game, the Trumps are converting political support directly into cash. This empire is set to flourish precisely because Trump is gutting the regulations that would normally

constrain it, brazen self-dealing that dwarfs even the unchecked emoluments violations of his first term, and represents perhaps the most flagrant exploitation of presidential authority in American history. Since Trump took office, federal agencies have issued a torrent of announcements, stripping away long-established financial regulations and criminal oversight from crypto businesses, dismantling what little oversight existed in the already predatory and poorly regulated industry. As these guardrails fall, the Trump family has aggressively expanded their ventures, which now span nearly every corner of the cryptocurrency world. These projects don't just generate direct profits for the Trumps.

They create new opportunities for outside interests to gain favor through cryptocurrency bribes. The timing and scope of these developments clearly demonstrate that federal policy is being weaponized for personal profit. Crypto industry backers. Trump has received at least $20 million in publicly reported political contributions from crypto benefactors, including $5 million from Ripple, $5 million from Andrescent Horowitz, and several million more from Coinbase, Gemini, Cracken, and Circle. The benefits to these companies have been substantial.

At least eight SEC enforcement cases against cryptocurrency firms have been dropped with prejudice or stayed pending resolution. Many have also been invited to shape the new rules for their industry, giving them a priceless opportunity to establish a profitable environment without burdensome financial oversight, legal compliance, and consumer protection requirements. Far from only benefiting these outside companies that bought favors in government, these changes are also paving the way for the Trump family's business interests. World Liberty Financial World Liberty Financial is a cryptocurrency company created by Trump and several partners in August 2024. The project was co-founded by Zach Whitkoff, son of Stephen Whitkoff, a longtime Trump associate, the newly appointed U.S. special envoy to the Middle East,

and, more recently, Trump's personal envoy to Vladimir Putin. The Elder Whitkoff also introduced the Trump's to the project's other co-founders. Although the project was entirely branded around Trump, his sons were prominently listed on the website with titles like D5 Visionary and Web3 Ambassador, and Trump was to receive 75% of protocol revenues from the outset, the Trump family nevertheless initially tried to maintain the illusion of an arm's-length relationship to the enterprise. When Trump was inaugurated, he dropped the pretense and took majority control of the company with a 60% stake. The project hasn't launched a trading platform,

but the Trumps have discussed a decentralized finance platform for crypto-financial services with promises of, quote, democratizing finance. Recently, World Liberty announced its own stable coin, USD-1, despite Trump's past warnings about similar cryptocurrencies, which he described, as, quote, currencies that would give our federal government absolute control over your money. And not having any actual platform to speak of has, of course, not limited World Liberty Financial from raking in money. It raised $550 million in its initial WLFI token sale, putting Trump's 75% cut at almost $400 million. $75 million came from Justin's son, a crypto entrepreneur with a shady past, who, as a foreign national, couldn't contribute to Trump's campaign.

He was, at the time, facing a lawsuit from the Securities and Exchange Commission alleging fraud. Recent reporting also suggests he was under investigation by the Justice Department, at least as of late 2024. With his investment, he earned an advisory position with World Liberty Financial, and shortly after Trump was inaugurated, the SEC case against him and his company was stayed pending potential resolution. The WLFI token is unusual. The project describes it as a governance token, which is a type of token which normally grants holders the right to vote on a project's direction. However, the project team has made decisions like launching a stable coin unilaterally and without a vote. The token has unusual restrictions that seemed carefully crafted to dodge the pre-Trump era SEC. It's only available for purchase

by non-U.S. citizens or accredited investors. It's not tradable, and it doesn't grant token holders a share of project revenues. However, some hope these restrictions will be lifted after the SEC's defanging is complete, potentially making for lucrative trading. Allegations of insider trading and quid pro quo deals have plagued the project, particularly amid reports of unusual token swaps with other cryptocurrency companies. For example, a World Liberty deal to acquire around $2 million of a Movement Labs token coincided with rumors of movement talks with Elon Musk's Department of Government Efficiency about integrating blockchain technology into government operations. Both World Liberty and Movement Labs denied these allegations. But an April 8 memo from Deputy Attorney,

General Todd Blanch, citing Trump's executive order on crypto, dismantled the Department of Justice's Cryptocurrency Investigations team, and directed the market integrity and major frauds unit to, quote, cease cryptocurrency enforcement. This may well have eliminated any remaining chance of a federal investigation into allegations of malfeasance in a business venture controlled by the president and his family. As for the stable coin, the timing is significant. World Liberty Financial announced plans to issue USD1 on March 25th, and just 10 days later, the Securities and Exchange Commission published a statement declaring that, quote, covered, stablecoins fall outside its authority, and that companies issuing stablecoins need not register. Meanwhile, a Trump-aligned Congress

is working to pass new, friendly, stablecoin legislation with substantial direction from the cryptocurrency industry, which again spent over $130 million installing crypto-friendly legislators, last election cycle. World Liberty Financial has also reportedly been in talks with cryptocurrency giant Binance about listing the USD1 stablecoin on their platform, a deal that could be highly profitable for World Liberty by giving them access to traders on the world's largest crypto exchange. These discussions coincided with separate negotiations between Binance and the Treasury Department, where Binances seeking to remove the compliance monitor installed just months ago as part of the company's guilty plea agreement,

in which they paid over $4 billion after knowingly violating anti-money laundering laws and sanctions. TruthSsocial and Truth.Fi. Trump Media and Technology Group, behind Trump's Truth Social platform, is also newly exploring the cryptocurrency world. Trump owns about 53% of the shares estimated, to be worth around $2 billion in the publicly traded company, which recently submitted filings to allow the trust holding Trump's shares, which is controlled by Donald Trump Jr., to sell them.

In January, the company announced it would enter the fintech and crypto space with a brand called Truth.Fi, focusing on, quote, America first investment vehicles. On March 24, TMTG announced a partnership with Singapore-based cryptoexchange, crypto.com, a company under, SEC investigation that had in August 24 received a Wells notice, informing them of an impending enforcement action. On March 27, only three days after the partnership announcement, crypto.com revealed that the SEC had dropped its investigation. Simultaneously with its announcement about entering fintech, TMTG announced it would allocate up to $250 million of its cash reserves

into investment vehicles, including Bitcoin and other cryptocurrencies. By investing in crypto, the company, and thus Trump, stands to profit from Trump's own actions to pump crypto prices, including announcing a Bitcoin strategic reserve to, quote, elevate this critical industry, and exploring avenues to use government money to buy Bitcoin. A Crypto Game Fortune recently reported that Trump plans to release a blockchain-based real estate theme games similar to monopoly. Unlike many traditional games where players use in-game currencies that cannot be transferred outside of the game, crypto games often aim to use cryptocurrencies for

game economies, attracting players with promises of earning real money simply by playing a video game. Blockchain games, sometimes dubbed play-to-earn games, have a troubled history. Struggling to balance in-game economies where wealthier players can simply pay to win, poorer players can't afford to play at all, and more and more new players must constantly join to sustain token prices. Games like Axi Infinity, which surged in popularity in late 2021, spawned a form of digital sharecropping, where wealthier individuals leased in-game assets to those in the Philippines and other low-wage areas, who were promised they could earn more playing these video games than from other local jobs. Other moral issues arose from children, playing games

with gambling-like mechanics, where they were encouraged to spend and often later lose real money on new characters or items. Then, of course, there was the record-breaking $625 million Axi Infinity exploit by North Korean hackers in March 2022, which caused players' tokens to plummet in value and never recover. Before the second Trump administration, Play-to-earned games faced new regulatory scrutiny. In its lawsuits against Coinbase and Binance, the Securities and Exchange Commission listed Axi Infinity's AXS token and the sandboxes Sand token among the unregistered securities they alleged the exchanges had listed. The lawsuit against Binance also named Decentraland's Mana token,

which, like Sand, is used in-game to buy land. And the Consumer Financial Protection Bureau was zeroing in on player exploitation via in-game currencies, crypto and otherwise, that could be converted to real-world money. Since his inauguration, Trump has been hard at work bulldozing regulatory or legal barriers for crypto companies that could require registration with financial regulators, more burdensome oversight, customer support programs and recourse for players whose in-game and or crypto assets are stolen, and limits on gambling mechanisms in games, all things that could cut into crypto gaming companies' profits. The Securities and Exchange Commission has practically broken

the sound barrier in its race to drop investigations and enforcement actions, including the lawsuits involving Binance and Coinbase naming the gaming tokens as securities. They've also declared most cryptocurrency assets exempt from its authority and invited crypto executives and lobbyists to write their own rules. The Trump administration has been working to shut down the CFPB entirely, with vocal support from crypto industry executives. Meanwhile, Congress is chipping away CFPB regulations, where both the House and Senate recently voted to overturn the CFPB's rule on crypto games, which would also have applied broader protections for crypto holders outside of the gaming sector. These votes fell along party lines, with all Democrats and independents opposing the

removal of the rule, and all Republicans except for one token senator supporting its nullification. All that remains is for Trump to sign the bill eliminating the rule in a move that will personally profit him. Bitcoin mining. In late March, Trump's sons, Eric and Donald Jr., announced their investment in a Bitcoin mining company called American Bitcoin, where Eric Trump also took the chief strategy officer role. The company was created through a deal with existing American Bitcoin mining firm Hut 8,

which contributed, quote, substantially all of its Bitcoin mining machines. This deal raised eyebrows among observers, including Vanek, analysts, and analysts. Matthew Siegel, who commented, quote, I don't fully understand the rationale of selling 61,000 minors in exchange for an 80% stake in a subsidiary that they previously owned 100% of. It seems to me that Hutt 8 determined a 20% donation to the Trump family was worth the benefits of getting looped into the Trump crypto empire. Eric Trump announced plans for the company to go public and hinted at a future partnership

with World Liberty Financial. They also intend to stockpile some of the Bitcoin they mine, again, adding potential upside if Trump successfully boosts Bitcoin prices. Memcoins Days before Trump's inauguration, he dropped the Trump meme coin, horrifying even some of his most devoted crypto industry supporters who described the cash grab as, quote, absolutely preposterous, plumbing new depths of idiocy. Shortly after, the Trump family launched a Melania meme coin, seemingly seen,

seeking a second windfall. While meme coin valuations are challenging to calculate accurately, the financial times estimated in early March that he and his team had profited at least $350 million from the stunt. On April 15, the Trump-controlled wallet appeared to cash out an additional $4.6 million. The Melania token team also appeared to cash out around $4.5 million in late March and early April. On April 7, bubble maps reported insiders had moved more tokens, notionally worth around $30 million from the project's designated, quote, community wallets and began selling them. This followed reports that the Melania token team is the same group involved in malfeasance around Libra,

a token affiliated with Argentina's president Milay, and a widespread insider trading scandal involving Solana-based meme coins. The initial token allocation for the Trump meme coin granted the president and his affiliates 80% control, but prescribed a schedule for gradual unlocking over three years. The first unlock is nearly here, allowing Trump to unload another 40 million tokens, notionally priced at around $310 million as of writing. Most early purchasers of the Trump token have lost money, with the token plummeting below $5 from its early heights of around 75.

The Trump family's meme coin capers are also unlikely to attract any substantial regulatory scrutiny with the regulators firmly under Trump's thumb. On February 27, the SEC stated that meme coins too fell outside of their authority. Criminal activity involving meme coins might normally fall to the Justice Department had they not just been directed to spend their fraud department's resources on quote, immigration and procurement frauds instead of crypto. NFTs. Don't forget the NFTs. Melania Trump got to them first, issuing her first collection in December 2021. After tepid interest, she ultimately appeared to purchase her own NFT for around $170,000 after it failed to attract the roughly $250,000 opening bid she'd asked. A second NFT project in July 2023 attracted a different kind of controversy when she used NASA images in like,

violation of NASA's merchandising policies. It too drew limited interest, selling only 55 tokens within a week for a combined total of less than $5,000. Trump was somewhat more successful in finding buyers for his NFT projects, launching the first one in December 2022. Following the post-NFT crash trend of describing them not as NFTs but as digital trading cards, the first Trump card NFTs feature uncanny, heavily muscled, noticeably younger-looking illustrations of the president in various heroic outfits. Later editions featured Trump's mugshot, and bulk buyers could earn upgrades, including scraps of the suit Trump wore in the mugshot, or dinner with the president during an off day from his New York criminal trial. Crypto Holdings

While the specifics of the Trump family's crypto holdings remain largely unknown, financial disclosures and blockchain records shed some light. In August 2024, Trump reported holding $1 million to $5 million in Eath, which matched with a publicly disclosed Ethereum wallet, then holding around $2.28 million worth of the token. Trump later sold sizable portions of those tokens beginning in December 2024. The personal crypto holdings of Trump family members who stand to benefit from market movements under Trump have not been publicly disclosed.

Some seem keen to experiment with moving markets themselves, with Eric Trump tweeting, quote, in my opinion, it's a great time to add ETH. You can thank me later in February, right around the time World Liberty Financial was moving a substantial amount of ETH to Coinbase. And that's not to mention the substantial risk of insider trading by those close to Trump,

who may have insight into his unpredictable behaviors that have flung the broader economy into turmoil. Concerns about insider trading have arisen, as insiders may have bought the dip in traditional equities markets, caused by Trump's, quote, Liberation Day, tariff announcements, earning them profits as subsequent announcements of tariff pauses kicked off a brief rebound. The same behavior could just as likely be happening in the crypto world, too,

as Bitcoin and other crypto prices follow broader market movements and could be exploited for personal profit with advanced knowledge of Trump's plans. The scope of the Trump family's cryptocurrency conflicts illustrates a degree of corruption that makes the emoluments concerns of Trump's first term seem quaint by comparison. Through his crypto ventures, Trump has created multiple avenues for personal enrichment, direct profits from cryptocurrency holdings and businesses, regulatory changes that boost his investments, potential insider trading, opportunities for outside interests to buy favor through crypto, quote, investments that would be

prohibited as campaign contributions. His dismantling of cryptocurrency oversight leaves consumers vulnerable to fraud and manipulation, while ensuring that neither he nor his benefactors will face meaningful scrutiny. Despite the scale of these conflicts and the clear abuse of power, attempts to check this corruption have been limited and largely ineffective thus far. Democratic senators have sent letters about both crypto-based and traditional asset-based financial corruption to the SEC Inspector General, the SEC, the Deputy Attorney General, and State Attorney General, pushing for investigations into Trump's and his administration officials' conflicts of interest. If there's been any action on these letters, it hasn't yet publicly materialized. Instead,

the gutting of regulatory oversight has continued, creating a dangerous convergence of the president's financial interests, and his power to shape policy. The ensuing regulatory vacuum will allow cryptocurrency markets to become increasingly susceptible to manipulation and abuse, while providing cover for fraud, money laundering, bribery, and other crimes. The industry under Trump is on course to become even more of a predatory playground, where insiders profit from exploitative schemes, high-risk lending programs promising to democratize wealth, unchecked bad actors, peddling investment schemes disguised as business opportunities, and meme coins functioning as thinly veiled pump and dump operations,

while ordinary investors are left without protection or recourse. And the degree to which the government has been embracing crypto also poses a risk to those who haven't gotten involved in crypto trading at all, as regulations limiting things like banks becoming heavily exposed to crypto, or pension and retirement funds incorporating crypto into portfolios, threaten contagion that everyday people could be forced to bear. 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

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