Guess who’s coming for dinner...
President Donald Trump’s deepening ties to the crypto industry are just one thread in a web of potential conflicts of interest he’s faced since re-entering the White House last November. But as the president’s first year in office heads toward the halfway point, the picture is likely to grow more complicated.
Crypto’s influence over the Trump administration has been under scrutiny from the get-go. The industry was one of the most significant backers of his presidential campaign, spending at least $135 million on supporting pro-crypto politicians in the 2024 election. Soon after Trump’s inauguration, officials linked to companies or investments in the sector were appointed to senior cabinet roles. Formerly crypto-skeptic financial regulators also underwent a vast overhaul, abandoning years-long enforcement actions under the premise of new rules and fresh leadership.
As time went on, Trump and his family’s involvement in the space began to materialize — decentralized finance project called World Liberty Financial with its own US-dollar stablecoin, two memecoin launches and a Bitcoin mining unit to name but a few. Now, both future legislation and Trump’s personal wealth appear to dovetail with ensuring crypto’s success.
In Washington, Democrat senators have led the charge against Trump’s crypto affiliations. A proposed bill to regulate stablecoins was initially stymied in the Senate over concerns it failed to address the potential conflicts of interest raised by the president’s activities. Led by Massachusetts Senator Elizabeth Warren, Democrats took steps including filibustering the bill and writing a letter to World Liberty Financial asking it to preserve records of communications regarding its USD1 stablecoin. Warren has also previously voiced concerns about Trump’s business ties with crypto exchange Binance and its founder Changpeng Zhao, who is seeking a pardon after pleading guilty to anti-money laundering violations in 2023.
On Monday, that bill eventually gained enough support to move forward to a debate on the Senate floor. It contained limited concessions aimed at combatting the influence of Trump’s USD1 stablecoin, such as preventing issuers from using terms related to the US government in their token’s name. Another clause states that existing ethics laws and regulations will prohibit senior executive officials and members of Congress from issuing stablecoins.
White House spokesperson Karoline Leavitt addressed the concerns about potential conflicts of interest earlier this month, saying “President Trump is compliant with all conflict-of-interest rules, and only acts in the best interests of the American public – which is why they overwhelmingly re-elected him to this office, despite years of lies and false accusations against him and his businesses from the fake news media.
For investors, the impact of winning Trump’s support in crypto is undeniable. When the president posted on social media about his plans for a strategic reserve, the tokens he mentioned — Solana, Cardano and XRP — spiked dramatically. When it emerged that there was in fact no plan to buy those tokens, their gains dissipated.
And in line with crypto’s transparency ethos, the actions of some of those buying their way into the president’s inner circle are often highly visible. Some backers of Trump’s World Liberty Financial, like Chinese crypto billionaire Justin Sun and market maker DWF Labs, have publicly advertised their investments and partnerships with the project. Meanwhile listed companies have announced plans to stockpile Trump’s memecoin, hoping to benefit from the connection. On Thursday, Trump will host a dinner for his memecoin's top holders, triggering further criticism. A public leaderboard displaying attendees’ wallets means that there’s at least a partially visible paper trail — even if those wallets are anonymized. An analysis conducted by Bloomberg News found many of those investors likely hail from overseas, with at least 56% of holders having used offshore crypto exchanges.
Ultimately, the furor isn’t over yet. Legislation for stablecoins and crypto market structure are expected to be ready for Trump to approve by August, meaning several months of lobbying and deliberation are still to come. The impact of his business empire on those rules will undoubtedly play a continued role in those Debates.
