The Trump family disrupted the crypto industry. What was thought to be a "reset" turned out to be a deep quagmire.

Author: Techub Selected Compilation

Original Title: Crypto’s First Family Is Deepening the Swamp

Written by: Lionel Laurent, Bloomberg Opinion Columnist

Compiled by: J1N, Techub News

Eric Trump, the second son of US President Trump, believes that now is a good time to buy Ethereum. He believes that his support for Ethereum has driven a short-term rise in the price of the currency. But at the same time, it is also a good time for politicians and regulators to take action to establish stricter regulatory measures against the cryptocurrency business that the Trump family and its related personnel are actively promoting. Its family business is expanding rapidly and has serious conflicts of interest with regulators.

It’s clear that the Trumps don’t just want to get the U.S. on a pro-crypto path with friendlier regulation, they want a piece of the action. World Liberty Financial, a decentralized finance platform backed by the Trumps, has built up a cryptocurrency reserve that includes about $340 million worth of Ethereum. According to Reuters, Trump has minted billions of Memecoin out of thin air and generated nearly $100 million in transaction fee revenue for presidential-related organizations. In addition, Trump’s Truth Social platform is also expanding its business and plans to enter the financial services sector.

This is not the kind of investment that your average family would make. Based on my calculations using current spot prices, the current book value of Memecoin held by Trump-linked organizations is about $14.9 billion. If these numbers are staggering, the risks are equally staggering. As investors and industry insiders rush to curry favor with the Trump team by buying its tokens, the result will be a more serious phenomenon of power transfer and corruption. It also creates a moral hazard, as the world’s most powerful people and their relatives promoting Memecoin and being able to take on its risks can lead to more people investing in Memecoin without knowing their own risk tolerance. When someone told Trump how much his Memecoin holdings were worth, he responded with an almost nonchalant “billions of dollars, that’s just chump change.”

So when Eric Trump tweeted a friendly hint that “Ethereum is worth buying,” he was not just saying it, as he seemed to realize when he deleted the sentence “You can thank me later” on X. Whether by coincidence or design, World Liberty put his ideas into practice, with the project address accumulating about $55 million worth of Ethereum after Trump’s tariff threats triggered a sell-off over the weekend. This was after the platform moved most of its reserves to Coinbase, although they denied any plans to sell. At this stage, the conspiracy theory that Trump's team is harvesting the market through crypto is not true. After all, Trump's tariff policy is not favorable to cryptocurrencies, and his son's tweets have a very limited overall impact on the market. However, given that this is the third week of the new administration, the atmosphere of "banana republic" is already very strong.

(When people say that a country is like a "banana republic", they are criticizing the country for its serious political chaos and corruption.)

Democracies have existed long enough to establish institutional safeguards to prevent political conflicts of interest. But the question is whether the authorities are determined enough to actually enforce them. The United States has promoted reforms of official ethics and transparency after Watergate, and has also introduced the 2012 Stock Act to combat insider trading, and the Foreign Interest Clause has existed since the beginning of the Constitution. Cryptocurrency is also not an excuse to evade regulation: the latest EU digital asset rules clearly stipulate provisions for insider trading and market abuse. Moreover, Trump’s nominee, former Democratic congresswoman Tulsi Gabbard, has agreed to sell her stock and cryptocurrency holdings to comply with the regulations.

Without effective enforcement and enforcement by authorities, regulation of behavior is futile. Trump seems unconcerned. Trump’s nominee for Commerce Secretary, Howard Lutnick, did not say whether he would recuse himself from the cryptocurrency working group because his firm, Cantor Fitzgerald, holds convertible bonds related to the stablecoin Tether. There are problems of insider theft within institutions that could cause financial losses in the future; for example, when German fintech company Wirecard AG collapsed, staff at its regulator, BaFin, were suspected of insider trading in Wirecard shares rather than fulfilling their supervisory responsibilities. Let’s hope that Trump’s cryptocurrency chief, David Sacks, will deliver on his promises to strengthen consumer protection.

At a minimum, a basic requirement for all politicians is that they must put all their investments into “blind trusts” on the day they take office, while also limiting the investments of their relatives. “Blind trusts” here refers to a form of asset management where politicians hand over their property to third parties to manage their investments without any influence on investment operations, in order to prevent officials from using their power for personal gain. This is the view of Garen Markarian, a corporate governance expert at the University of Lausanne. What is worrying is that the prevailing attitude among the elite is to advocate less supervision rather than more scrutiny of politicians and their related investments.

While Trump is joining forces with the cryptocurrency community to lash out at the so-called “de-banking” phenomenon, Musk, meanwhile, is allowed to set his own rules and is using DOGE as a weapon against the government. This is classic overconfidence, especially considering that the president has been convicted of fraud. This also sends a signal of arrogance to ordinary people, showing that the law will be more lenient towards the privileged class with inside information. The regulatory chaos in the field of cryptocurrency has been exposed, but there are few signs of action to clean up this chaos.