Key Takeaways
- •U.S. House Democrats have introduced the MEME Act, aiming to ban politicians from issuing or promoting memecoins.
- •Trump’s $TRUMP token hit a $15 billion valuation before crashing 82%, leaving over 800,000 investors in losses.
- •The bill faces no chance of passing under current Republican control, but it sets the stage for future political battles over crypto ethics.
Democrats Take Aim at Trump’s Crypto Empire
Earlier this year, House Democrats unveiled the Modern Emoluments and Malfeasance Enforcement (MEME) Act, a bill designed to stop politicians from profiting through cryptocurrency. The legislation, introduced by California Representative Sam Liccardo, comes directly in response to the explosion — and subsequent collapse — of Donald Trump’s memecoin.
Launched in January, the Trump token skyrocketed to over $15 billion in market value before crashing dramatically. What began as a flashy success story quickly turned into another example of retail investors being left behind.
Inside the MEME Act
The proposed legislation casts a wide net. It would ban sitting presidents, vice presidents, members of Congress, cabinet officials, and even their spouses or dependent children from issuing, sponsoring, or endorsing any digital asset, security, or commodity.
Violations would carry criminal and civil penalties, ensuring that no public official could personally profit from crypto-related ventures. Rep. Liccardo stated:
“The Trumps’ issuance of memecoins financially exploits the public for personal gain and raises the specter of insider trading.”
800,000 Investors Left Holding the Bag
Data indicates a grim outcome for many investors. According to CoinMarketCap, Trump’s memecoin has plunged over 82% from its peak, leaving approximately 813,000 wallets experiencing losses. Collectively, investors have lost more than $2 billion, while the Trump Organization and its partners reportedly collected $100 million in trading fees.
Retail investors, many of whom purchased tokens near the highest valuations, witnessed their holdings diminish significantly, while early insiders and large holders profited substantially.
Why the MEME Act Won’t Pass — Yet
Despite its assertive language, the MEME Act is currently facing significant obstacles. With Republicans holding a majority in both the House and Senate, and demonstrating limited interest in scrutinizing Trump’s financial activities, the bill's immediate prospects are unfavorable.
Liccardo’s proposal has garnered support from about a dozen Democratic co-sponsors, but it lacks any Republican support. Democrats recognize that the bill serves primarily as a symbolic gesture within the current political climate, but it is intended to establish a foundation for potential legislative action following the next election cycle.
Trump’s Expanding Crypto Web
The memecoin represents only one facet of Trump’s increasing involvement in the cryptocurrency space. Two entities associated with Trump, CIC Digital LLC and Fight Fight Fight LLC, are reported to control around 80% of the remaining token supply following the initial distribution phase.
Furthermore, a concerning aspect is that over $324 million in transaction fees have been directed to wallets linked to the project’s creators. This arrangement means the Trump family benefits from every trade executed on the platform. Senator Elizabeth Warren has raised concerns that foreign entities could potentially exploit this structure, warning:
“Anyone, including the leaders of hostile nations, can covertly buy these coins, raising the specter of untraceable foreign influence.”
The Broader Problem: Political Memecoins
The Trump memecoin is not an isolated incident of political crypto ventures experiencing difficulties. Leaders in the Central African Republic and Argentina have also recently introduced or endorsed similar tokens. Both of these initiatives ultimately collapsed after insiders cashed out their holdings.
A discernible pattern is emerging: political tokens successfully generate considerable hype, attract a large number of retail investors, and frequently conclude with substantial losses for these investors.
From the perspective of Democrats, the MEME Act is an initiative aimed at achieving ethical reform. For Republicans, it is perceived as political theater. For the global community, it serves as a potent reminder that even in the current era, cryptocurrency continues to function as a Wild West where influence and speculation frequently intersect.