The United $tates of Pump-and-Dump

For Donald Trump, politics has been lucrative. According to some estimates, the president has roughly doubled his net worth since announcing his candidacy in 2016, and almost all of this new wealth can be traced back to businesses that exist because of his political career. Trump Media, which went public last year, accounts for more than half of his entire net worth.

Measured by its fundamentals, Trump Media is essentially worthless. Last year it lost $400 million and had a revenue of just $3.6 million, which is less than the annual take of the average McDonald’s franchise. The main business has a paltry user base and has struggled to grow compared to other social media upstarts, such as Bluesky. The only thing going for the company is the successful political career of its majority owner, which has been enough to give it a higher valuation than companies like Etsy and Wayfair, which generate billions in revenue each year. 

Had Trump lost the election, the value of his stock would almost certainly have evaporated. Instead, his reelection opened even more opportunities for graft, while clearing the way for the audacious cash grab of the eponymous meme coin he launched a few days before his inauguration. If Trump Media is a financial black hole that exists to enrich its top insiders, TrumpCoin is even worse — a flagrant scam that, unlike traditional cryptocurrencies, does not even bother with the pretense of utility, but exists purely as a speculative vehicle and Ponzi scheme. Sure enough, the president’s meme coin has followed a predictable path since its initial launch, soaring in value and adding billions of dollars to Trump’s net worth before nosediving by about 80%. While a few insiders and early traders walked away with massive gains, many more retail investors have lost money, according to an analysis by the crypto forensics firm Chainalysis. For Trump, however, the coin could fall to zero and he would still walk away with substantial gains based on fees alone, said to have earned him and his partners around $100 million in the first few weeks of trading.  

Trump’s meme coin gambit was so audacious that it drew condemnation from the crypto media. One commentator in Bitcoin Magazine denounced it as little more than a “pump and dump self-enrichment scheme.” Crypto’s true believers hoped that Trump would legitimize their beloved technology and make it respectable; instead he legitimized the con while ushering in a new golden age of corruption. 

The president’s conflicts of interests alone make this administration one of the most ethically compromised in history, but it goes well beyond Trump. The world’s richest man is currently wreaking havoc on the entire federal government, while the Cabinet is stuffed with billionaires who have a wide range of business interests that could influence their judgment. The scale of conflicts swirling around the new administration is staggering, and it is for this very reason that the president and his political appointees have taken radical steps toward eliminating any kind of independent oversight. In his first month in office, Trump dismissed 17 inspectors general, fired the director of the Office of Government Ethics and dismissed all Department of Justice officials who were involved with his criminal prosecution. He has also rolled back anti-corruption measures like a Biden-era order that banned political appointees from accepting gifts from lobbyists. 

Top officials have done their part as well. At the DOJ, Attorney General Pam Bondi has disbanded various anti-corruption task forces while pausing enforcement of anti-corruption laws including the Foreign Corrupt Practices Act, which prohibits Americans from bribing foreign government officials. The Treasury Department, meanwhile, recently announced that it would no longer enforce a 2021 anti-money laundering law that requires businesses to disclose the identities of their real beneficial owners (in an effort to crack down on illicit shell companies). 

All of these initiatives fit into the administration’s broader deregulatory agenda that favors the wealthiest players in industries like crypto and finance — a club that Trump has seamlessly joined. It is clear that reducing risks in financial markets and policing fraud will be low priorities for the new administration’s regulators. The president has tapped crypto enthusiasts and “deregulation zealots” to head agencies like the Securities and Exchange Commission and Federal Deposit Insurance Corporation, while his cronies are in the process of trying to shutter the agency tasked with protecting consumers from financial fraud. 

Not surprisingly, these officials have been quickly reversing the previous administration’s efforts to bring more transparency to the crypto industry. The SEC has dropped or paused several high-profile cases against crypto exchanges and figures, such as a civil fraud case against Justin Sun, a crypto billionaire who just so happened to purchase tens of millions in tokens from another Trump-backed crypto venture (World Liberty Financial) back in December. The agency then concluded its first month of zealous deregulation by clarifying that “meme coins” will not be subject to regulatory oversight, as if to formally sign off on the president’s latest scam. 

This new regulatory approach ensures that the president and allies like Elon Musk are “well insulated by their own government from any kind of accountability,” according to Corey Frayer, who served as a senior adviser on crypto to former SEC Chair Gary Gensler. Under this new deregulatory regime, the lawless and predatory behavior that has invariably led to past financial crises will once again flourish. This is particularly true for crypto, which has a long history of novel frauds and schemes. “It is the complete backing away of regulation by the SEC that is going to allow not just the noncompliance with securities laws, but the proliferation of these scams in the meme coin space,” said Frayer, who is confident that the outcome will be another FTX-size failure in the “not-too distant future.” 

The meltdown could arrive sooner rather than later. The stock and crypto markets have already started to crater on fears that the new administration’s reckless policies — from tariffs to mass layoffs in the government — could trigger a recession. On Sunday, in an apparent effort to pump up the ailing crypto market, Trump posted on Truth Social that his administration would be establishing a “strategic crypto reserve,” which appears to serve no purpose other than to inflate digital assets held by some of his biggest donors. An all-too familiar story ensued, with the president’s post triggering a massive rally in the crypto market before it came crashing down less than 24 hours later. It wasn’t long before questions began to stir about whether the president had just helped orchestrate a massive pump-and-dump. “Donald Trump, the first crypto President, just helped pull off the biggest crypto rug pull of all time,” declared libertarian economist Peter Schiff, who called for a congressional investigation into who authored the posts and who, if anyone, knew about them in advance. At least one big trader appears to have made a highly risky (and successful) bet on both bitcoin and Ethereum shortly before the president’s announcement, raising questions about whether they or anyone else had advance knowledge of the president’s post. 

It would certainly be good for citizens to know whether the president of the United States had orchestrated a massive pump-and-dump on the behalf of donors or other insiders. But neither the Republican-controlled Congress nor the captured SEC (or any other regulatory agency) is likely to investigate. Even if a massive fraud were to be exposed, it’s hard to imagine anyone — least of all the president — facing any kind of consequences. For all intents and purposes, corruption is now legal in America for those on the right team. This latest fiasco is a cautionary preview of what’s to come. Trump’s second term is shaping up to be a four-year smash-and-grab, with the president and his cronies stuffing their pockets while everyday Americans are left holding the bag.