Trump Cryptocurrency Venture Earns Millions in Trading Fees
Entities associated with former U.S. President Donald Trump have accumulated approximately $100 million in trading fees from their cryptocurrency venture within two weeks, according to estimates from three blockchain analysis firms. This windfall comes amidst significant losses incurred by numerous small investors.
The meme coin, dubbed "$Trump," launched on January 17th and experienced a rapid surge, reaching a peak market value of over $14.5 billion on January 19th. However, it has since dropped by two-thirds.
Blockchain analysis firms, including Merkle Science and Chainalysis, examined the public ledger for $Trump tokens for Reuters. Their estimates suggest that the coin has generated between $86 million and $100 million in trading fees as of January 30th. These estimates significantly exceed previous reports.
One of the entities behind $Trump is CIC Digital, a company owned by Trump. The official $Trump website indicates that CIC Digital will receive revenue from trading activities involving the coin. It remains unclear what portion of the fees, if any, has accrued to Trump personally or the ownership of other entities connected to the coin.
According to Chainalysis, at least 50 of the largest investors in $Trump have made profits exceeding $10 million each. However, approximately 200,000 crypto wallets, primarily holding small amounts, have lost money on $Trump.
Trump's administration has expressed a commitment to promoting digital assets and cryptocurrency regulation. However, the substantial financial returns from his crypto ventures and their opaque ownership structure have raised concerns from ethics experts and political opponents.
Despite the lack of precise details on Trump's ownership, it is known that he has invested in other cryptocurrencies, including decentralized finance (DeFi) projects and non-fungible tokens (NFTs).
The exact ownership of $Trump is concealed behind limited liability companies, with Fight Fight Fight, a Delaware-registered company, owning the official website.
Blockchain analysis firms track crypto coin movements on public ledgers, connecting anonymous digital wallets to individuals or entities through proprietary research and investigations.
The trading fees were generated on Meteora, a DeFi exchange where liquidity providers earn fees for facilitating trades. The three wallets associated with $Trump's venture have earned significant fees from these activities on Meteora.
While the exact beneficiaries of the trading fees are unknown, CIC Digital and Celebration Cards, which also receives revenue from the meme coin's trading activities, own the remaining 800 million $Trump coins, currently valued at approximately $16 billion.
Meteora co-founder Ben Chow acknowledged that he had limited knowledge of the team behind $Trump and that his co-founder had direct contact with them. The fees on Meteora fluctuate during periods of market volatility, with higher demand leading to increased fees.
The rapid accumulation of trading fees from $Trump has raised questions about ethics and potential conflicts of interest, as Trump holds significant financial interests in the crypto sector while having regulatory authority over it.