‘horrible Look’: Crypto Lobby Reels From Trump’s ‘memecoin’

President-elect Donald Trump and his family are using the final days before he is sworn in as the 47th president to launch a new cryptocurrency product.

It isn’t welcome news to everyone in the crypto industry.

The digital assets business is poised to be a big winner in the second Trump administration, with Republicans vowing to advance policy changes that could boost the sector — and help it overcome longstanding concerns about its legitimacy. But Trump’s move on Friday to introduce a so-called memecoin — a crypto token with no real-world value that traders can invest in — has triggered alarm among investors and industry representatives in Washington that the new coin will provide ammunition to critics who accuse crypto of being rife with fraud and risk to consumers.

“It’s absolutely preposterous that he would do this,” said Nic Carter, founding partner at the crypto investment firm Castle Island Ventures who describes himself as an “avowed and explicit” Trump supporter. “They’re plumbing new depths of idiocy with the memecoin launch.”

The concern illustrates the risk Trump is taking by launching a new crypto product just days before his inauguration. Memecoins — a class of crypto sometimes referred to as “shitcoins” that includes digital assets with names like Dogecoin and Fartcoin — are speculative assets that are highly volatile by nature. If investors lose money on the coin, it could become a liability for both Trump and the crypto sector.

The new product is also a clear signal that Trump and his family are willing to take on new business opportunities, even while he is in office, in an area that could directly benefit from friendly policies enacted by his own administration or a GOP-controlled Congress. Trump vowed ahead of his first term that there would be “no new deals” while he was in office. Now, his eldest sons — Donald Trump Jr. and Eric Trump — are starting their own crypto company, World Liberty Financial, which drew similar concerns from crypto advocates like Carter during the campaign.

A Trump-owned company owns 80 percent of the memecoin’s total supply, according to its website.

“It’s awful,” said one Washington lobbyist who was granted anonymity to speak candidly about sensitive dynamics within the sector. “This is a horrible look for the industry already trying to make the case that we’re not a bunch of hucksters, scammers and fraudsters.”

The coin has already become a target for Democrats. Rep. Sean Casten (D-Ill.), a crypto critic on the House Financial Services Committee, said Trump “continues to make clear he will not let detriments to his supporters or ethics stand in the way of enriching himself."

Still, even those who are concerned about Trump’s new coin don’t expect it to meaningfully impede the policy wins the crypto sector is in line to achieve. Trump has issued other crypto products in the past, and Republicans on Capitol Hill are gung-ho about advancing a regulatory overhaul that may boost its growth.

Lawmakers and advocates in Washington are on the brink of taking major steps that could help legitimize crypto. Republicans are poised to form new subcommittees and working groups on Capitol Hill that will focus on digital assets and they have pledged to pass a slate of industry-friendly legislation, including a crypto-backed regulatory overhaul that would shield firms from the enforcement crackdown they faced during the Biden years.

Trump’s transition team did not immediately respond to a request for comment on Sunday. Trump’s son, Eric Trump, touted the coin on X Saturday, writing that he is “extremely proud of what we continue to accomplish in crypto.”

“We are just getting started!” he wrote.

Trump’s memecoin has taken off since debuting late Friday night. By 6:15 p.m. ET on Sunday, the token had risen to $44.95 — making it the 24th most valuable token in the world with a fully diluted value of more than $45 billion, according to CoinGecko, which tracks crypto data. And major crypto exchanges like Coinbase and Binance were moving to add it onto their platforms. Kraken, another major crypto trading venue, added the memecoin for trading Saturday afternoon.

The Trump push into memecoins accelerated Sunday when Melania Trump announced on social media her own, called MELANIA. Trump’s token fell in trading shortly thereafter.

Memecoins have long traded in crypto markets, with Dogecoin perhaps the best-known example. Launched as a joke, the crypto has exploded in popularity over the years, with its price often riding on the whims of its backers — the best known of which is Elon Musk.

Yet, many others have fallen flat. And while the Securities and Exchange Commission has waged a sweeping crusade against many of the crypto market’s biggest players, the Wall Street regulator has largely stayed away from the high-flying corner of crypto where memecoins trade, given questions about its authority over the tokens, said Marc Fagel, a former SEC official who previously led its San Francisco office.

“Is [it] healthy to have so much money tied up in what are essentially pyramid schemes?” Fagel said. “Of course not. But what are the tools to prevent that? We don’t have a lot of legal tools to prevent people from doing things that are really dumb with their money.”

Whether the Trump memecoin’s surge can last — and for how long — is unclear.

Carter said the token could end up sticking around for longer than others because of Trump. In the stock market, shares in the president-elect’s social media company, Trump Media & Technology Group, have similarly risen despite lingering questions about the Truth Social parent’s future prospects. But “at the end of the day,” Carter added, “there’s no fundamentals to this thing.”

“It’s going to bite a lot of people in the ass — including people who believe in crypto,” a financial industry executive, who was granted anonymity because they are not authorized to speak publicly, said of the Trump memecoin. “But nothing ever seems to hurt him.”