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Senators request the SEC to investigate Trump Meme Coin

Democratic Senators Elizabeth Warren and Richard Blumenthal sent a joint letter to SEC Chairman Paul Atkins on Monday, requesting an investigation into whether the Trump-related Meme coin violates securities laws. The two senators cited reports indicating that since the launch of the Trump Meme coin in January 2025, nearly 1 million crypto wallets have incurred losses totaling approximately $3.81 billion. They accused Trump of potentially being involved in a "Rug pull" and requested the SEC to determine whether there are fraudulent arrangements or violations of securities laws.Warren and Blumenthal stated that despite the token being promoted by Trump's own public statements, its price has significantly declined, and it is necessary for the SEC to investigate whether there is a fraudulent scheme and to prevent the continued extraction of immense value from hundreds of thousands of investors. At the time of this letter, the White House is evaluating the latest ethical compromise regarding conflicts of interest related to Trump's crypto business. This compromise is seen as key to advancing the "Clarity Act" crypto market structure bill. A previous version of the draft, endorsed by Trump, faced Democratic opposition because it only restricted public officials and their spouses from issuing or sponsoring digital assets, did not cover other family members, and was to be enforced by the Department of Justice.The two senators also stated that Trump has a "keen interest" in encouraging supporters to trade his Meme coin and claimed that Trump has earned $636 million from this Meme coin. As the Senate is set to enter its August recess on Friday, with the focus shifting to the November elections, whether the "Clarity Act" can advance in the short term still depends on whether both parties can reach a consensus on the conflicts of interest related to Trump’s crypto dealings.

The Trump Meme Coin controversy escalates, U.S. senators request SEC to investigate Rug Pull risks

According to CNN, U.S. Democratic Senators Elizabeth Warren and Richard Blumenthal have requested the U.S. Securities and Exchange Commission (SEC) to investigate the Meme coin TRUMP issued by Trump, to confirm whether the project involves fraud or improper profit-making. In a letter to SEC Chairman Paul Atkins, the two stated that the Trump Meme coin project "may constitute an illegal scam" and urged the regulatory agency to investigate whether the token involves "illegal fraudulent activities or facilitates improper profit acquisition."Reports indicate that Trump launched his personal Meme coin TRUMP just days before his inauguration in 2025. After the token went live, its price surged, reaching a market value peak of approximately $9 billion on January 19, 2025, but then plummeted significantly. Currently, the market value of the token has fallen to less than $400 million, a decline of over 95% from its peak. According to data from the cryptocurrency data platform CoinMarketCap, investors who bought at the high are currently facing about a 97% loss. Blockchain analytics firm Nansen previously cited data showing that by the end of June, nearly 1 million investors had incurred losses due to this Meme coin, with total losses amounting to approximately $3.8 billion. About 80% of the supply of the Trump Meme coin is held by entities related to the Trump Organization. Trump has previously stated that he complies with the law and allows his family to manage personal financial matters.Elizabeth Warren and Richard Blumenthal emphasized in their letter whether the project is similar to a Rug Pull in the cryptocurrency industry. They believe that even if it is not a traditional sudden withdrawal scam, it may still fall under a "soft pull" that leads to investor losses through a gradual withdrawal of market support. The SEC has not yet commented on this matter.
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