Our Crypto President
The growing scandal of $TRUMP
Donald Trump is not best known for the coherence or consistency of his positions on questions of public policy, even on those matters he cares most about, as we have seen recently with his tariffs. Nor is he known for his fealty to longstanding American legal, cultural or political traditions and norms. This after all is the man who while campaigning in Iowa in 2016 said "I could stand in the middle of Fifth Avenue and shoot somebody, and I wouldn't lose any voters, OK?" But even by the standards of Trump World, the President’s recent about-face on the subject of crypto policy and his extensive personal financial activities in the crypto space should cause all of us who care about good governance in this country to stand up and take note.
The New York Times journalist Ezra Klein recently published an excellent podcast episode devoted entirely to this subject, “The Growing Scandal of $TRUMP”, which inspired me to dig a bit more deeply into President Trump’s personal activities in and around the crypto space. I plan in future posts to comment on some of the Trump administration’s specific crypto policy initiatives, but for now my goal is simply to document some of what Trump and his family have been up to recently, for whatever light it might shed on the President’s past and future official acts.
Let’s explore.
Wasn’t Trump previously a critic of crypto? Yes he was, and it was not that long ago. During and shortly after his first term in office, President Trump was generally regarded as a crypto cynic, making statements like the following:
"I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air." - Donald Trump on x.com in 2019.
"Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity." - Donald Trump on x.com in 2019.
"Bitcoin, it just seems like a scam," - Trump to Fox Business in 2021.
"I don't like it [bitcoin, or crypto more generally] because it's another currency competing against the dollar." - Trump to Fox News in 2021.
"I think they should regulate them [crypto] very, very high [sic]" - Trump to Fox Business in 2021
Trump’s crypto conversion. Soon after he left office in 2021, Trump experienced what to some might look like the financial equivalent of a Damascene religious conversion, renouncing his former hostility to crypto and becoming a vociferous advocate, promoting and proclaiming what Christianity Today now calls “the gospel of $TRUMP”. At some point during his conversion, Trump discovered how this new and strange god (crypto) might be employed to rapidly refill his family’s depleted coffers and pave his way back into the Oval Office, by tapping into the network (and pocketbooks) of the large and growing congregation of crypto true believers.
From NFTs to WLF. Beginning in December 2022, then former-PresidentTrump launched a series of Trump and MAGA-themed NFTs (Non-Fungible Tokens, essentially digital trading cards), which he sold to members of his political base, raising a few million dollars in the process. This was admittedly a small amount of money by Trump family standards, but when you are facing the possibility of hundreds of millions of dollars of legal costs, every little bit helps I suppose. And the NFT experience seems to have whet Trump’s appetite for more and bigger deals.
By September 2024, the Trump family had upped its crypto game significantly with the launch of World Liberty Financial, a self-styled “decentralized finance” company with the motto “Be DeFiant”. World Liberty Financial (WLF) was co-founded by Donald Trump and his three sons, with the former President designated as “Chief Crypto Advocate”, Don Jr. and Eric as “Web3 Ambassadors” and Barron as “Chief DeFi Visionary”. Other founders included a couple of suspect get-rich-quick promotors as well as Zach Witkoff, the son of Trump golfing buddy and future presidential Middle East envoy, Steve Witkoff (also a WLF founder).
The WLF venture started slowly, but picked up momentum after receiving an initial $30 million investment from Justin Sun, a billionaire crypto promotor then facing SEC charges for market manipulation and the sale of unregistered securities. Sun subsequently purchased another $45 million of the coins, reportedly generating $50 million in income for the President and his family. The SEC dropped its legal charges against Sun a month or so after Trump took office.
Initially, the principal activity of World Liberty was issuing WLF tokens, the coins sold to Sun, the purpose of which has never been clear, apart from generating money for the Trump family. I have not been able to determine exactly how much income the Trumps have received in total from the sale of WLF tokens, but some estimates put the number at over $400 million, based on the Trump family’s reported 75% revenue share with WLF, which sold $550 million of tokens through March of 2025.
So what did the purchasers of the WLF tokens get in exchange for their half a billion dollars? As far as I can tell, absolutely nothing, other than perhaps bragging rights and some level of influence with the Trump family. By their terms, WLF tokens have no intrinsic economic value. The tokens do not entitle the holders to any residual earnings or cash flow generated by World Liberty Financial, essentially all of which is paid out directly to the founders, most notably the Trumps. They are not usable in commercial activity generated by WLF. And unlike meme coins, the WLF tokens are not tradable, on or off an exchange, and so have no capital gains potential either.
The President’s new coin. In late January, 2025, just two days before taking office for the second time, then President-elect Trump shocked the crypto world by launching his own personal meme coin, $TRUMP, which was followed the next day by the launch of his wife’s coin, $MELANIA. The news was generally not well received in the professional crypto community, who feared the President was putting personal profits above public policy, a conclusion which was becoming increasingly hard to deny.
In each offering, 200 million coins were initially distributed, leaving the Trumps with 800 million coins to be distributed (and monetized) at a future date, expected to be within the next three years. The initial issuance of $TRUMP coins reportedly generated an estimated $350 million for the Trump family, who reportedly earned another $100 million in additional fees during just the first two weeks of secondary market trading, while the new President was sitting in the Oval Office furiously signing executive orders, including the foundational order for the new administration’s crypto policy, “Strengthening American Leadership in Digital Finance”.
The newly issued $TRUMP coin was initially quite popular with speculators and fans of the President. During the first days of trading, the secondary market price of $TRUMP jumped to a peak of $44, adding $35 billion to the Trump family net worth, at least on paper. The market price of the coin subsequently fell by 80%, imposing billions of dollars of losses on those who bought into the secondary market hype, but still leaving the Trump family with an incremental $10 billion of net worth (so far unrealized).
WLF’s $2 billion payday. In March 2025, World Liberty Financial issued its first tranche of stablecoins (USD1), in the rather surprising amount of $2 billion. The coins were purchased by the Abu Dhabi (UAE) sovereign wealth fund MGX for use as payment currency in its acquisition of a large minority interest in crypto exchange Binance. (Crypto investments are often paid for with stablecoins, rather than fiat cash, facilitating settlement and bypassing legacy financial system payment ‘rails’, while maintaining a stable link to the value of the USD.) As a result of the $2 billion stablecoin issuance, WLF will earn tens of millions of dollars of annual income from the interest earned on the proceeds. (Stablecoin issuers invest the proceeds of coin sales into interest-earning assets, typically USD-denominated, but do not pay interest to coin holders, or at least have not done so historically.). And much of this future income, potentially totaling hundreds of millions of dollars over time, will reportedly flow to the Trumps and the Witkoffs, who seem to have brokered the deal.
As noted, the ultimate recipient of the $2 billion MGX investment was the crypto exchange Binance, which had previously (in 2023) pleaded guilty to criminal violations of US anti-money laundering laws, charges for which its founder Changpeng Zhao (aka “CZ”) paid a $50 million fine and served four months in federal prison. Around the same time as the MGX transaction was being finalized, representatives of the Trump family were reportedly holding “deal talks” of some sort with Binance, pursuant to which the Trumps allegedly sought to obtain a stake in the company’s US affiliate. More recently, Mr. Zhao has reportedly approached the White House seeking a pardon from President Trump. And just this past week, the Trump administration announced that the SEC dismissed its sole outstanding lawsuit against Binance and Zhao.
The $TRUMP Dinner. A week ago Thursday, President Trump hosted an “exclusive” dinner for several hundred of the largest holders of $TRUMP, with the top 25 holders promised a private reception with the President and a tour of the Oval Office. The market price of the $TRUMP coin surged in the run-up to the dinner, as coin holders scrambled to secure their invitations, generating over $1 million in trading fees for the Trumps. Dinner attendees collectively purchased an estimated $150 million of $TRUMP coins, some apparently for the sole purpose of currying favor with the President. According to press reports, one attendee who met the President at the dinner subsequently obtained a presidential pardon for her son, which freed him from serving four years in jail and repaying $4.4 million in restitution to the victims of his fraud.
DJT’s Bitcoin Capital Raise. Just this past week, Donald Trump’s social media company, Trump Media (ticker DJT), raised $2.5 billion of new capital from an undisclosed investor group. The proceeds of the offering, which consists of $1.5 billion of DJT common shares plus $1 billion of convertible notes, will be used to fund new bitcoin purchases by Trump Media, in what Eric Trump has called a “bitcoin treasury”, with the President himself holding a 35-40% stake in the company (pro forma for the offering).
The Trump Media transaction has clearly been modeled on the financing strategy of MicroStrategy (now Strategy, MSTR), the controversial company whose stockholders happily pay a hefty premium to net asset value for the privilege of owning leveraged bitcoin indirectly through an investment vehicle managed by the financial alchemist Michael Saylor. And who can blame them, given Saylor’s track record turning $30 billion of bitcoin investment into $100 billion of shareholder value, with off-the-charts historical returns to his shareholders. Saylor himself describes the Strategy financial structure as a “quadratically reflexive, engineered instrument”, whatever that may be. Others have called it an “infinite money glitch”, essentially a market imperfection ripe for picking. Journalist Molly Roberts characterizes it as a “New religion: You have to believe in bitcoin for it to work”. But however one chooses to describe it, the MSTR (and now DJT) investment strategy ultimately depends on finding investors who are willing to pay $2 for the bitcoin equivalent of $1 bills, and then convince their friends to do more of the same.
And so it should come as no surprise to learn that it seems to have been Michael Saylor himself who convinced the Trumps to follow his lead, not because he wanted generously to cut them in on his action, but because he needed someone else to buy more bitcoin and boost the value of his own company’s shares. And in this case the ‘someone else’ was Trump Media itself, who will in the future perhaps be followed by the US government’s new Strategic Bitcoin Reserve, established at the order of President Trump.
Crypto or Kryptonite? Donald Trump campaigned in part on his promise to make America the “crypto capital of the planet”, a mission which if achieved may or may not turn out to be a good thing, either for America or for the planet. But even if the Trump administration’s crypto initiatives turn out to be an unmitigated disaster for the country, there will nevertheless be some people who make an obscene amount of money for themselves along the way. And by all accounts Donald Trump intends to be one of them, however much damage he leaves behind in his wake
At present it appears that half of the country, and a majority of the US Congress, does not seem particularly concerned by what has become the growing scandal of $TRUMP. But this could change quickly if just one or two other things go bad for our President, for example tariffs or the midterm elections. And if (when?) this happens, our Superman President may discover to his chagrin that what he thought was crypto turns out to have been kryptonite.
Which, as with “transgenic” and “transgender” mice, turn out to be very different things.
Links
The Growing Scandal of $TRUMP, Ezra Klein, NY Times, May 28, 2025
Steve Witkoff Pursues Trump’s Diplomatic Deals. The Son Chases Crypto Deals, WSJ, May 22, 2025
What Happened in Two Days at a Very Wild Crypto Party, WSJ, May 2, 2025