- Trump’s memecoins spark fears of bribery and foreign influence.
- Vitalik Buterin warns politician memecoins blur the lines between support and speculation.
- Elizabeth Warren penned a letter to regulators about conflicts of interest.
First, the surging popularity of memecoins drew controversy, with tales of rug pulls, pump-and-dump schemes, and influencers scamming their fans.
Then US President Donald Trump’s new memecoin joined the fray, triggering criticism even among his supporters. Now, Ethereum co-founder Vitalik Buterin and Senator Elizabeth Warren are warning these tokens could become tools for political corruption, bribery, and self-enrichment.
Trump launched his TRUMP token, followed by his wife’s MELANIA coin, on the eve of his inauguration.
Politician-backed coins are a “perfect bribery vehicle,” Buterin wrote in an X post.
Meanwhile, Warren is flagging concerns over foreign influence, consumer exploitation, and conflicts of interest.
Trading political influence
Buterin, who didn’t specifically name Trump or the First Lady in his screed, warned that these memecoins create pathways for individuals to covertly fund politicians without direct accountability.
“You just buy and hold the coin, and this increases the value of their holdings passively,” he explained.
The holders of these tokens can also show their support to the issuer without leaving a public trace.
“You can even hold the coin privately and show that you are holding it to whoever you need to show,” he said.
This raises serious risks to democracy, he concluded, as markets designed for commodities could become hijacked to trade political influence.
Senator Elizabeth Warren has echoed these concerns, outlining the ethical and legal implications of the Trump and Melania coins.
In a joint letter with fellow Massachusetts Democrat Jake Auchincloss, Warren questioned how regulators would address concerns over foreign influence and consumer protection.
“Anyone, including the leaders of hostile nations, can covertly buy these coins, raising the spectre of uninhibited and untraceable foreign influence,” Warren wrote in the letter, addressed to the Office of Government Ethics, the Department of the Treasury, the Securities and Exchange Commission, and the Commodity Futures Trading Commission
Warren also criticised the terms of the tokens, which prevent consumers from pursuing fraud claims or participating in class-action lawsuits.
“This memecoin could hurt the very people President Trump says he is working to help,” she added.
However, Trump’s crypto czar David O. Sacks defended the coins, framing them as collectibles akin to baseball cards.
“People buy it because they want to commemorate something,” Sacks said in an interview with Fox News, dismissing concerns of conflicts of interest.
Crypto market movers
- Bitcoin has gained 3.8% in the past 24 hours and is trading at $105,490.
- Ethereum is up 6.3% over the same period to $3,405.
What we’re reading
- Bitcoin will reach $200,000 and Ethereum $10,000 this year, says Standard Chartered ― DL News
- Will this fix $ETH’s image? ― Milk Road
- President Trump Declares Crypto a National Priority in Executive Order ― Unchained
- 8 big moments you missed yesterday ― Milk Road
- Kidnapped co-founder of Ledger released as French police hunt for perpetrators ― DL News
Kyle Baird is DL News’ Weekend Editor. Got a tip? Email at kbaird@dlnews.com.
