Mark Hays is the Associate Director, Cryptocurrency and Financial Technology at Demand Progress Education Fund and Americans for Financial Reform Education Fund.
Days before taking the oath of office, DonaldTrump and his family launched a new cryptocurrency token — known informally as a meme coin — called $TRUMP, as the crypto industry held an inaugural ball. Despite scant details about the coin’s value, use, or risks, trading took off, sending the coin’s price skyrocketing. On paper at least (or on the blockchain, as it were), the Trump family and their businesses are now several billion dollars richer. Not to be outdone, First Lady Melania Trump has also launched her own meme coin. Ivanka Trump, meanwhile, is distancing herself from an unauthorized $Ivanka coin.
While campaigning, Trump promised to make the United States the “crypto capital of the planet” after crypto bros poured over $130 million to elect a crypto-captive administration and Congress. Trump has tapped pro-crypto acolytes for regulatory posts across the federal government and released pro-crypto executive orders to establish a White House crypto working group and prioritize crypto across government. To top it off, the huckster-in-chief launched his $TRUMP meme coin: one part a vehicle for personal profit, one part a playground taunt over federal ethics rules, and one part a crypto-fascist pledge of allegiance. It’s a move that could not only rip off Trump supporters but also significantly corrode the democratic process.
Let’s step back. In case you’re wondering, a “meme coin” is a crypto token based on little more than an online image, slogan, or passing social trend. The crypto industry argues it is a sort of digital collectible. The fine print on the $TRUMP coin website notes that the coins “are not intended to be, or to be the subject of, an investment opportunity, investment contract, or security of any type.”Famous meme coins include Dogecoin (a crypto token based on the image of a dog, originally introduced as a parody of crypto) and various tokens based on the controversial, alt-right mascot Pepe the Frog.
Another recent example is $HAWK, fronted by Haliey Welch, known as the “Hawk Tuah” girl (for her colorful description of an intimate act during an on-the-street interview).
A meme coin doesn’t even purport to do anything (as opposed to other crypto assets, which still have almost no practical uses other than laundering drug money or tax evasion). Most end up being worthless; many are outright “rug pulls” that lure in retail investors with hype, pumping up the value, only so insiders can cash out and leave others holding the bag — as may have been the case with $HAWK, which plummeted 90 percent after its launch.
The $TRUMP fine print requires meme coin buyers to give up their rights to sue, the remedy many $HAWK coinholders are now pursuing. Instead, they would have to go through forced arbitration.
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