Conflictorama
The many conflicts of interest in Washington swirling around the Trump White House and Elon Muck overshadow some involving President Trump and his family's crypto ventures.
Photo by Fozie Rabbi
In Washington’s evolving Conflictarama, it seems that no day goes by without new allegations of conflict of interest involving individuals like Elon Musk, who run roughshod over government agencies that oversee vast business empires. However, one conflict simmers just beneath the surface of the chaos: President Donald Trump’s crypto ventures.
The prospect that a sitting president would use his office to initiate business ventures and regulatory changes that would help enrich him and his family is breathtakingly brazen. However, the President doesn’t seem to earn many black marks from the public for his forays into the arcane and little-understood cryptocurrency markets. He plows ahead.
So far, the president and his family have launched two notable crypto ventures that will benefit from an executive order he signed that backs the crypto industry. Trump has vowed to become the “crypto President” and to “make America the crypto capital of the world,” a posture that also thrills his billionaire backers and crypto enthusiasts in Silicon Valley.
The venture that has attracted the most attention is the meme coin, $TRUMP, which he promoted on his Truth Social media platform and X, Elon Musk’s platform. Just before he took office, he proclaimed: “Join my very special Trump Community. GET YOUR $TRUMP NOW.”
For those not schooled in crypto, a meme coin is a volatile cryptocurrency originating from internet phenomena, such as images of pop culture icons, jokes, or celebrity mascots.
Meme coins have no practical use like a dollar or a share of stock. They are all about making money by trading them and speculating on crypto exchanges. For simplicity’s sake, meme coins are like trading cards featuring famous ballplayers that sports enthusiasts collect and trade for money. Only meme coins are not cards; they are digital tokens designed to capitalize on Trump’s brand and involve big money. They are also infamous for “pump and dump” schemes, where savvy traders inflate the value of meme coins through trading activities and dump them to secure a fast and tidy profit.
President Trump announced $TRUMP on the cusp of his inauguration after his meme coins launched on Meteora, a little-known crypto exchange, according to analyses of the coin commissioned by Reuters and The New York Times. The analyses said the coin surged in value. According to market reports, the coins reached a high of about $75 before plunging to about $15, about where they now trade.
The analyses estimate that entities behind President Trump accumulated nearly $100 million in trading fees from trading $TRUMP coins amidst the euphoria that greeted them. According to the Reuters and Times analyses, at least fifty large investors made more than $10 million each, while 200,000 small investors lost money.
The firms hired by the news organizations were unable to ascertain how much of the estimated $100 million in trading fees went to Trump personally versus CIC Digital, a trading entity owned by the Trump Organization and its partners that controls eighty percent of the coins and collects fees as they are traded. Reuters said the company structure was too opaque for the analysts to make such a determination.
The President’s surprise disclosure about the creation of the $TRUMP coin raised fresh concerns about his affinity to capitalize on his celebrity by marketing a highly speculative digital asset to his followers, particularly around the time of his inauguration.
“It makes us all look corrupt and self-interested,” Nic Carter, a Trump fan who runs the crypto investment firm Castle Island Ventures, told the Times while attending the Crypto Ball during inauguration celebrations. The extent to which the President benefitted from the coin will be hard to determine.
Unlike prior occupants of the Oval Office, President Trump doesn’t make his tax returns public. He has pledged to put his assets in a trust his children manage.
In response to questions about the fees, the president’s son, Eric Trump, told Reuters that he is proud of what “we continue to accomplish in crypto. $TRUMP is currently the hottest digital meme on earth,” he said, adding, “We are just getting started.”
That’s true. $TRUMP is not the only crypto venture involving the president and his family. Last September, Trump unveiled World Liberty Financial (WLF) at his Mar-a-Lago compound in Florida.
Although the venture purports to be unaffiliated with the president, Trump’s name and picture surrounded by swaths of gold appear all over the documents promoting WLF and its crypto token $WLFI. The venture creates a conflict of interest in the first paragraph of its narrative:
“Inspired by the vision of Donald J. Trump, World Liberty Financial (WLF) is pioneering a new era of Decentralized Finance (DeFI),” the WLF sales pitch says., “WLF’s mission is to democratize access to financial opportunities while fortifying the global status of the U.S. Dollar. To accomplish this goal, WLF strongly supports the U.S. dollar-based stablecoins and DeFi applications that seek to preserve the U.S. Dollar’s status, ensuring that it remains the global reserve currency for the next century.”
Although President Trump is not directly involved in WLF governance, the WLF narrative states that a company the Trump Organization is associated with, DT Marks DEFI LLC, will receive 22.5 billion $SWLFI tokens, rights to 75 percent of the venture’s net revenues, and will be expected to promote it occasionally.
So, a conflict arises because President Trump’s tariff policies will undoubtedly strengthen the dollar, which is a prime goal of WLF. Since tariffs make foreign goods more expensive for American companies to import, the dollar strengthens when demand for foreign currency falls along with the decline in imported goods. They often cause inflation, too. Indeed, the dollar rose 7.5 percent during Trump’s first term because of his imposed tariffs.
WLF had a strong launch following the unveiling of the tokens by the Trump family at Mar-A-Lago. These tokens resemble meme coins but are generally more stable. The $WLFI tokens sold well due to the venture's political connections, partnerships, perceived strength in decentralized finance—which eliminates expensive bank interventions—and the power of the Trump brand.
In the months that followed, WLF faced significant challenges. Part of the issue may stem from the nature of the Tokens. They grant the right to vote on the organization’s protocols or rules of the road. However, WLFI tokens are non-transferable and cannot be resold like shares of stock.
Indeed, the fine print in the documents outlining the rights of token owners states, “all $WLFI will be non-transferable and locked indefinitely in a wallet or a smart contract. Consider your purchase of Tokens similar to other non-refundable purchases of goods and services and accept the risk that once you pay the purchase price, your interest in the Token may decline, and you have no expectation of reselling the Token. Assume that the Tokens are non-transferable indefinitely.” WLFI tokens cannot be sold to mitigate a loss if they decrease in value.
The Token Sale document states, “The net proceeds from the Token Sale will be distributed to the developer and service providers… and may involve compensating employees and contractors,” including DT Marks DEFI LLC, a firm linked to the Trump Organization. The document names President Trump as its “Chief Crypto Advocate” and identifies his sons Eric, Donald Jr., and Barron Trump as “Web3 Ambassadors.”
The company's management has also raised eyebrows among those monitoring the venture’s progress. In its sales pitch notes, WLF claims that the venture's success largely hinges on two individuals: Zak Folkman and Chase Herro, “each of whom would be difficult, if not impossible, to replace.” Donald Trump Jr., the president’s eldest son, praised both men: “You could put them in a boardroom at Goldman Sacks, and they’re going to smoke the people in the room.”
However, others, including Eswar Prasad, an economist from Cornell University, disagreed. He told The New York Times that he was skeptical the duo possessed the technical and financial expertise to make the venture successful. The Times also outlined both men's business histories, complicating their narratives.
Herro, the paper reported, describes himself as a "dirtbag of the internet," and has a history of legal troubles, including convictions for theft and marijuana possession, as well as financial issues such as car repossessions, eviction lawsuits, and a $207,000 court judgment for fraud involving a medical marijuana dispensary.
Folkman, a Skidmore College graduate, the Times said, previously ran a business called Date Hotter Girls, where he provided dating advice under the pseudonym Zack Bauer. He has also been involved in various entrepreneurial ventures with Herro. The Times reported that Herro and Folkman have launched at least seventeen companies, many of which have faced legal challenges and financial setbacks. However, they have now built lucrative careers in the crypto industry.
Meanwhile, the value of WLFI tokens has significantly decreased since they were first issued, mainly due to poor sales performance, limited investor interest, market perception, and a website crash during the Token launch.
$TRUMP and $WLTI aren't the only crypto ventures linked to the Trump family. Another family member, First Lady Melania Trump, launched her coin shortly after her husband. Some traders shifted from his meme coin to a new target. “The Official Melania Meme is live! You can buy $MELANIA now,” she posted on X, a message that her husband reposted. $MELANIA captured some of the President’s crypto spotlight. Her coin rose while his fell in value.
James O’Shea is a longtime Chicago author and journalist who lives in North Carolina. He is the author of several books, the former Los Angeles Times editor, and the Chicago Tribune's managing editor. Follow Jim’s Substack, Five W’s + H here.