Behind Trump's Crypto Empire: The Triple Game of Regulation, Ethics, and Financial Risks

Original Title: ++Trump's newest grift: Building a cryptocurrency empire while destroying its regulators++

Original Author: Molly White

Translation: Daisy, ChainCatcher

Against the backdrop of Trump's return to power, the cryptocurrency industry is experiencing unprecedented regulatory loosening. Seizing this opportunity, the Trump family is rapidly laying out related industries, creating a multi-billion dollar crypto empire that encompasses platform construction, token issuance, infrastructure control, and even market manipulation, with power and capital closely intertwined.

This process not only brings enormous profits but also raises serious questions about conflicts of interest and abuse of power. From platform holdings to policy interventions, from meme coin speculation to potential insider trading, the Trump family is transforming the national regulatory system into a tool for its own profit.

This article will outline the operational path of the family's crypto business, revealing how they profit in a regulatory vacuum, and explore the systemic risks triggered by this "expansion of the crypto empire."

Financial Backers, Loosened Rules: How Crypto Capital Quickly Opens Political and Business Channels

After Trump regained power, he quickly received at least $20 million in political donations from crypto industry backers. Among them, Ripple and Andreessen Horowitz each contributed $5 million, while giants like Coinbase, Gemini, Kraken, and Circle also provided millions in support.

These backers subsequently received policy returns: at least eight enforcement cases by the U.S. Securities and Exchange Commission (SEC) against crypto companies were withdrawn or delayed. Many companies were also included in the new regulatory drafting process, seizing the opportunity to tailor market rules for themselves in an environment lacking regulation, with low compliance requirements and weak consumer protection.

The loosening of policies not only allowed donating companies to reap substantial profits but also cleared institutional barriers for the Trump family's crypto expansion, laying the groundwork for the entire business operation.

Source: ++Follow the Crypto++

World Liberty Financial: The Core Asset of Trump's Crypto Empire

In August 2024, Trump and his partners founded the crypto company World Liberty Financial. The project's co-founder, Zach Witkoff, is the son of Steven Witkoff, a long-time ally of Trump, who currently serves as a special representative for Middle Eastern issues and was recently appointed as his personal envoy for a visit to Putin, playing a key role in facilitating the project's connections.

Although the platform's promotion and positioning almost entirely revolve around Trump himself, with the official website listing his son as a "DeFi visionary" and "Web3 ambassador," promising that 75% of the protocol's profits would belong to him, the family initially tried to create a "keep distance" posture. It wasn't until Trump took office again that he officially held 60% of the shares, becoming the actual controller.

Source: World Liberty Financial website homepage

Despite not having launched any trading platform, World Liberty has raised as much as $550 million, and based on the profit-sharing ratio, Trump personally stands to gain nearly $400 million. The company claims it will create a "financial democratization" platform and issue a stablecoin USD1, which sharply contrasts with Trump's past characterization of stablecoins as "government-controlled financial tools."

Notably, $75 million of the project comes from Sun Yuchen—a foreign crypto entrepreneur under investigation by the SEC and the Justice Department for fraud, who cannot donate directly to Trump. Subsequently, Sun was appointed as an advisor to World Liberty, and after Trump took office, the SEC's lawsuit against him was shelved.

The $WLFI token issued by World Liberty is defined as a "governance token," theoretically granting holders voting rights, but the platform team unilaterally advanced significant matters, including the issuance of stablecoins, without any voting. The token also includes several clauses to evade regulation, limiting purchases to non-U.S. citizens or "qualified investors," and it is currently non-tradable. Some investors bet that once SEC regulation is further weakened, these restrictions will be lifted, and the token may enter the secondary market for returns.

Meanwhile, the project has also faced widespread scrutiny for potential insider trading. Media reports revealed that World Liberty acquired tokens from Movement Labs for about $2 million, coinciding with rumors that the latter was negotiating blockchain cooperation with Elon Musk's "Government Efficiency Department." Both parties denied the claims, but the market reacted strongly.

On April 8, 2025, a memorandum released by Deputy Attorney General Todd Branch indicated that the Justice Department, based on an executive order signed by Trump, officially disbanded the cryptocurrency investigation task force, terminating all related enforcement actions. This move almost severed the federal investigation path into the Trump family's crypto business.

The timing of the USD1 stablecoin's announcement also drew attention: on March 25, World Liberty announced it would issue the stablecoin, and just ten days later, the SEC stated that "certain types" of stablecoins are not under its regulatory purview, allowing companies to issue them without registration. Meanwhile, Congress was pushing related legislation to loosen regulatory restrictions on stablecoins, driven by pro-Trump factions. Behind this is over $130 million in lobbying funds invested by the crypto industry in the previous election cycle.

Additionally, World Liberty is negotiating with Binance to list USD1 on its platform. If successful, the project will tap into the user base of the world's largest crypto exchange, presenting enormous profit potential. At this time, Binance is negotiating compliance matters with the U.S. Treasury, seeking to lift the regulatory agreement established due to previous anti-money laundering violations, which stemmed from a judicial settlement after paying over $4 billion in fines.

Truth Social and Truth.Fi: Social Platforms Turning to Crypto Investment

Trump's "Trump Media & Technology Group" (TMTG), the parent company of Truth Social, has also begun to venture into the crypto space in recent years. The company has gone public, with a valuation of about $2 billion, and Trump holds approximately 53% of the shares. Recently, TMTG applied to allow a trust fund controlled by Donald Trump Jr. to sell its holdings.

In January 2024, TMTG announced its entry into the fintech sector under the brand "Truth.Fi," launching so-called "America First" investment products. On March 24, the company announced a partnership with Singapore's Crypto.com. Notably, this platform was previously under investigation by the SEC and received a "Wells Notice" in August of the same year, indicating impending enforcement actions. However, just three days later, Crypto.com announced that the SEC had terminated its investigation.

At the same time, TMTG stated it would use up to $250 million in cash reserves to invest in Bitcoin and other crypto assets. Through this move, the company—essentially Trump himself—hopes to profit directly from market movements driven by his own statements and actions. Policies he proposed, such as establishing a Bitcoin strategic reserve and pushing for government funds to purchase Bitcoin, could have substantial impacts on the market.

Blockchain Gaming Plans and Regulatory Loosening: From "Monopoly" to Real-World Arbitrage

According to Fortune magazine, Trump is preparing to launch a blockchain real estate-themed game, similar to "Monopoly," but built on a cryptocurrency system, emphasizing "Play-to-Earn" to attract players to earn real profits through the game.

Such games have faced criticism in the past, with issues centered around economic structural imbalances and moral hazards. Wealthy players can "pay to win," while those with poorer economic conditions may find it difficult to participate. The system heavily relies on the influx of new players to maintain token value, and once the growth rate slows, it risks collapse.

The 2021 sensation Axie Infinity sparked the "digital sharecropping" model: wealthy individuals rented game assets to players from low-income countries, promising them earnings above local wages through gameplay. This model ultimately led to widespread ethical controversies, involving mechanisms akin to gambling for minors and players losing real money after investing. In March 2022, the game was also attacked by North Korean hackers, resulting in losses of about $625 million, and the token price has yet to recover.

In recent years, U.S. regulatory agencies have begun to strengthen their scrutiny of such projects. The SEC, in suing Coinbase and Binance, accused them of listing unregistered securities, including game tokens like Axie Infinity's $AXS, The Sandbox's $SAND, and Decentraland's $MANA. Meanwhile, the Consumer Financial Protection Bureau (CFPB) is also concerned about exploitative practices in the monetization of game tokens, especially involving underage players.

However, under Trump's renewed administration, these regulatory barriers are being rapidly dismantled. He is pushing to loosen restrictions on crypto companies, including eliminating registration, compliance, accountability, and gambling mechanism regulations. The SEC has recently "accelerated" the withdrawal of multiple enforcement actions against Binance, Coinbase, and related game tokens, announcing that most crypto assets are no longer under its regulatory purview, while inviting industry executives to participate in drafting new regulations.

The Trump administration is also pushing to completely shut down the CFPB, a proposal that has received public support from senior executives in the crypto industry. Congress is also cooperating, with both the House and Senate passing measures to repeal the CFPB's regulatory rules established for crypto games, originally intended to strengthen protections for underage users and non-gaming crypto asset investors.

This repeal shows a clear partisan divide: Democrats and independent lawmakers unanimously oppose it, while all but one symbolic Republican senator support it. The bill is currently awaiting Trump's signature. Once signed, it will not only completely end regulatory barriers to related activities but also bring direct benefits to him and the crypto projects he is involved in.

Trump Family Enters Bitcoin Mining, Renewed Questions of Interest Transfer

At the end of March 2025, Trump's two sons—Eric Trump and Donald Trump Jr.—announced their investment in the Bitcoin mining company American Bitcoin, with Eric serving as Chief Strategy Officer.

The company was established with the assistance of mining firm Hut8, which transferred "almost all" of its mining equipment to the new company, raising industry skepticism. VanEck analyst Matthew Sigel commented, "I really can't understand why they would exchange 61,000 mining machines for just 80% of the remaining shares of a previously 100% owned subsidiary." Many observers believe this resembles a "political stock swap"—Hut8 giving up 20% equity to the Trump family in exchange for policy conveniences and potential returns.

Eric Trump stated that the company plans to go public in the future and will collaborate with World Liberty Financial. He also revealed that they would retain some of the mined Bitcoin, betting that Trump would again drive up Bitcoin prices, thus gaining asset appreciation profits.

Massive Launch of Meme Coins, Trump Family Cashes Out Hundreds of Millions

Just before Trump took office again, he launched a meme coin named $TRUMP, shocking some supporters in the crypto community. Industry insiders bluntly described his actions as "blatant money-grabbing," criticizing it as "absurdly ridiculous, setting a new low for stupidity."

Soon after, the family launched the $MELANIA meme coin, further igniting controversy. The Financial Times estimated that by early March, Trump's team had cashed out at least $350 million through these two tokens. On April 15, a wallet address controlled by Trump allegedly cashed out $4.6 million again.

Meanwhile, the $MELANIA team reportedly sold about $4.5 million worth of tokens from late March to early April. On April 7, the on-chain analysis platform Bubblemaps revealed that insiders from the project transferred tokens worth about $30 million from a wallet labeled "community distribution" and sold them on a large scale. More concerningly, the team had previously been accused of manipulating the $LIBRA token related to Argentine President Milei and engaging in insider trading of several Solana-based meme coins.

In the initial distribution of the $TRUMP token, Trump and his associates held up to 80% control, with a three-year linear unlocking mechanism. The first round of unlocking is about to start, allowing Trump to sell up to 40 million tokens, valued at approximately $310 million at current prices. Meanwhile, many early investors have suffered severe losses, with the token price plummeting from a peak of $75 to less than $5.

Although these trading activities are suspected of market manipulation or insider trading, regulation is almost absent. On February 27, the SEC explicitly stated that meme coins are not within its regulatory scope. Normally, such potential criminal activities should be addressed by the Justice Department, but that department has been instructed to prioritize resources for areas like "immigration and government procurement fraud," leaving the crypto market sidelined.

In other words, the Trump family is leveraging the regulatory vacuum to exchange low-risk for high returns in the meme coin market.

NFT Operations Make a Move: From Purchasing "Obscure Works" to Selling "Suspect Cards"

In addition to cryptocurrencies and meme coins, the Trump family is also actively involved in the NFT (non-fungible token) market. As early as December 2021, Melania Trump launched her first NFT series, but the market response was tepid. A piece with a starting price of about $250,000 received no bids and was ultimately purchased by her for about $170,000.

In July 2023, she launched a second series, which again sparked controversy. This project used NASA images, allegedly violating its prohibition on commercial use. This series also saw poor sales, with only 55 pieces sold in a week, generating less than $5,000 in revenue.

In contrast, Trump's own performance in the NFT project has been more commercially rewarding. In December 2022, he launched the first batch of "digital trading cards" (Trump Cards), intending to downplay the "NFT" label. This set of cards portrays an idealized image—muscular, young, and handsome, dressed as Superman or a cowboy, with exaggerated and unrealistic styles.

One of Trump's "digital trading cards" (from OpenSea)

Subsequent series went further, directly themed around Trump's suspect booking photo, and set up an "upgrade reward" mechanism for buyers, including pieces of the suit worn in the booking photo and even opportunities to dine with him during his New York criminal trial.

Unclear Holdings, Linked Actions: The Trump Family's Crypto Asset Holdings Raise Concerns

Although the Trump family's holdings in crypto assets remain opaque, public financial disclosures and on-chain records provide some clues. In August 2024, Trump reported holding Ethereum (ETH) valued between $1 million and $5 million, which roughly matches the approximately $2.28 million balance in his wallet at the time. Since December of that year, this wallet has begun to sell ETH on a large scale, having now sold off most of its holdings.

The holdings of other family members have not been disclosed, but they clearly have opportunities to profit directly from market fluctuations influenced by policy. Some even actively "influence the market." For example, Eric Trump tweeted in February this year, "Now is a good time to increase your $ETH holdings, remember to thank me later." Almost simultaneously, World Liberty Financial, led by the Trump family, made significant transfers of ETH to Coinbase, raising external doubts about "coordinated trading."

More concerning is the potential insider trading risk among Trump's inner circle. They are well aware of Trump's style of operation and may possess non-public information, while Trump has repeatedly made abrupt policy decisions that have caused severe market impacts.

A recent example is particularly telling: after Trump announced the "Liberation Day" tariff policy, leading to a significant stock market drop, there were signs that some insiders bought in at low prices, profiting from the market rebound after the policy suspension announcement. Similar operations could also occur in the crypto market. With the prices of assets like Bitcoin fluctuating wildly, if one has advance knowledge of policy directions, it is easy to gain considerable profits through information asymmetry.

The Ultimate Form of Power Monetization: From Regulatory Collapse to Systemic Risk

The Trump family's conflicts of interest in the crypto field have long surpassed the "salary clause" controversies of his first term. By laying out multiple projects, Trump has constructed a complete path for profiting from power: directly profiting from tokens and companies, promoting regulatory policies favorable to his investments, engaging in suspected insider trading, and providing external forces with a channel to gain political influence through "investment"—if converted into campaign donations, these actions would constitute illegal behavior.

At the same time, the regulatory system is being systematically dismantled. Trump continues to weaken constraints on the crypto market, exposing ordinary investors to fraud and manipulation risks, while he and his backers face almost no substantive scrutiny.

Despite increasingly obvious signs of power abuse, the current checks and balances remain largely ineffective. Some Democratic lawmakers have already written to the SEC Inspector General, senior Justice Department officials, and several state attorneys general, calling for investigations into Trump's and his team's conflicts of interest, but so far, there has been no substantial public progress.

Even more alarming is that the ongoing collapse of regulation is leading to a high degree of overlap between the president's personal financial interests and national policy power, with the crypto market gradually becoming a playground for the elite to profit: high-risk lending projects disguised as "financial democratization," fraudulent behaviors packaged as technological innovation, and meme coins evolving into tools for "pump and dump."

In this process, ordinary investors are marginalized, with no avenues for rights protection. The risks of this deregulatory experiment are spreading to the traditional financial system. As banks expand their exposure and pension and retirement funds become involved, society as a whole is quietly bearing the systemic costs that may be profited from by a very few, but paid for by all. Once the bubble bursts, the victims will not only be speculators but also those ordinary people who have never participated.