🤷♂️Trump issued meme coins before taking office to grab the market, and may face potential censorship risks in the future
Trump and his wife Melania's meme coins (TRUMP and MELANIA) were quickly launched before their inauguration, and the market value of TRUMP tokens even soared to $15 billion at one point, which was a remarkable move. However, this also aroused widespread discussion and concern in the community.
However, Zack Guzmán, founder of Coinage, said that the Trumps were so anxious to launch meme coins in order to avoid the emoluments clause in the Constitution, which prohibits the president from profiting from foreign governments or using his position for personal gain. Guzmán also said: "Wait one more day, and Trump may face the risk of impeachment again." This operation is simply a dance on the "edge of the law"!
But the problem is that meme coins, a new thing, are not mentioned in the Constitution at all! Critics say that although the Constitution wants to prevent the president from abusing his power, the challenges brought by modern things like meme coins are not even thought of by Jefferson and Madison.
The launch of memecoin also brings a lot of legal and tax issues. The SEC may regulate it as a security, and the IRS may impose taxes on the profits of these cryptocurrencies. Although the Trump team said that TRUMP coin is not a security, the SEC's attitude is still unclear. Because if it is determined to be a security, it will be troublesome!
At the same time, on the IRS side, the Trump team currently holds 80% of TRUMP coins. These coins will be unlocked in three years. Will they be taxed when they are unlocked? How to calculate capital gains tax? At the same time, the price of memecoin fluctuates so much that tax returns are even more messy!
Memecoin may touch the political red line. If Trump uses this to circumvent the election donation regulations, he may incur legal liability. Although there is no evidence of violation, such behavior may undermine the US political financial rules and even raise corruption questions. Moreover, if the market value of TRUMP coin plummets, it will also affect his political image.
In short, although Trump's memecoin looks cool, there are a lot of legal, tax and political risks behind it.
💬How do you think this will develop? Is Trump's memecoin a game changer, or will it expose him to legal risks and liability? Let us know what you think in the comments!
