Former U.S. President Donald Trump and his political allies are increasingly tightening their ties with the cryptocurrency sector, gradually bringing digital assets closer to the mainstream flow of U.S. finance – in stark contrast to his previous view when he called cryptocurrency a "scam."
This week, Vice President JD Vance attended and spoke at a Bitcoin conference in Las Vegas, while Trump Media announced plans to raise $2.5 billion to invest in Bitcoin. Notably, the U.S. Department of Labor has just officially withdrawn guidelines that previously advised 401(k) retirement funds against investing in cryptocurrency – a move that could affect millions of savers in the U.S.
"President Trump is the first real ally of cryptocurrency in the White House," Mr. Vance stated at the conference, asserting: "Now, we have a new leader at the helm."
Risk of conflicts of interest and ethical policy concerns
The Trump administration's strong support for the cryptocurrency sector is raising concerns from ethics experts, who warn that this could lead to conflicts of interest, especially as the President and his family have significant personal investments in the sector.
"The President's actions make the public skeptical of whether his cryptocurrency agenda truly promotes innovation or merely serves personal interests," said Timothy Massad, former Chairman of the Commodity Futures Trading Commission (CFTC) under President Obama. He also warned that even the appearance of bias could undermine regulatory efforts in the sector.
Professor Richard Briffault from Columbia Law School – an expert on campaign finance and government ethics – also expressed caution about the Labor Department lifting guidelines prohibiting investment in cryptocurrency in 401(k) plans. "Given the business interests of the Trump family, there is reason to question whether this decision is in the public interest or aimed at facilitating an industry in which they have a financial interest."
The White House has not issued an official response, but the press office denied any conflict of interest, asserting that the President's assets are managed through a blind trust run by his sons.
Bitcoin peaks, Trump administration pushes for the establishment of a "Bitcoin reserve"
Bitcoin prices have reached a record high this month, rising about 16% since the beginning of the year and over 57% compared to the same period last year. Cryptocurrency supporters argue that this asset can free financial transactions from government control and traditional financial institutions – a viewpoint that officials in the Trump administration are also embracing.
Vice President Vance has called cryptocurrency a hedge against poor executive policies, inflation, and the private sector's "increasingly discriminatory practices against consumers based on their political views or beliefs."
Mr. Eric Trump, who also spoke at this conference, stated that he wants to "see some major banks disappear."
Trump Media – the loss-making company operating the Truth Social social network – announced that investments from financial institutions would be used to build a "Bitcoin reserve" to "protect the company from discrimination and harassment by financial institutions," according to CEO Devin Nunes.
Mr. Trump aims to make America the "cryptocurrency capital of the world"
Mr. Trump is committed to making the United States a global hub for cryptocurrency, while appointing a "cryptocurrency envoy" and hosting the first high-level conference on this field at the White House. In March, he signed an executive order recognizing Bitcoin as a national reserve asset – a proposal that the cryptocurrency community has pushed for many times since he took office.
However, ethics experts particularly criticized Mr. Trump and the First Lady for launching the meme coins $Trump and $Melania in January, as well as for his attendance at a private gala with major investors in his coin (the administration insists this was not an official event and that Mr. Trump participated in a personal capacity).
Some members of the Trump family have also backed a Bitcoin mining company and a stablecoin project named USD1 this spring.
According to an analysis by the Washington Post, since the release of Trump's meme coin, companies associated with him have generated $312 million from token sales and $43 million from transaction fees. However, for many retail investors, investing in Trump's meme coin has turned into a loss.#TrumpCryptoSupport $BTC