Author: Lionel Laurent, Bloomberg Opinion Columnist Compiler: J1N, Techub News
Eric Trump, the second son of US President Trump, believes that now is a good time to buy Ethereum, and he believes that his support for Ethereum has driven the 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 for the cryptocurrency business that the Trump family and its related personnel are actively promoting. The family business is expanding rapidly and has serious conflicts of interest with regulators.
It is now clear that the Trump family does not only want to put the United States on the path of supporting cryptocurrency through more friendly regulatory measures, but they also want a piece of it. World Liberty Financial, a decentralized financial platform supported by the Trump family, has established cryptocurrency reserves, including about $340 million worth of Ethereum. According to Reuters, Trump issued billions of Memecoin out of thin air and generated nearly $100 million in transaction fee revenue for the president's related institutions. In addition, Trump's Truth Social platform is also expanding its business and plans to enter the financial services field.
This is not a small investment made by an ordinary family. According to my calculation using the current spot price, the current book value of Memecoin held by institutions associated with Trump is about $14.9 billion. If these figures are already staggering, the risks are equally staggering. As investors and industry insiders rush to curry favor with the Trump team by purchasing its tokens, it will eventually lead to more and more power transfer and corruption. At the same time, this also brings moral risks, because when the most powerful people in the world and their relatives promote Memecoin and are able to bear its risks, more people will invest in Memecoin without knowing their own risk tolerance. When someone told Trump how much his Memecoin holdings were worth, he responded almost nonchalantly, "Billions of dollars, that's just a small amount of money."
So when Eric Trump friendly-tweeted that “Ethereum is worth buying,” he was more than 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, and the project address accumulated about $55 million worth of Ethereum after Trump’s tariff threats triggered a sell-off over the weekend. This was after the platform transferred most of its reserves to Coinbase, although they denied any plans to sell. At this stage, the conspiracy theory that Trump’s team harvested the market through crypto is not true. After all, Trump’s tariff policy is not conducive 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 a country is like a "banana republic," they are criticizing the country for having serious political chaos and corruption.)
Democracies have existed long enough to build institutional safeguards to prevent conflicts of interest in politics. 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 no excuse for evading regulation: the EU's latest digital asset rules explicitly stipulate provisions for insider trading and market abuse. Moreover, former Democratic Congresswoman Tulsi Gabbard, nominated by Trump, has agreed to sell her stock and cryptocurrency holdings to comply with relevant regulations.
If the authorities do not effectively implement and strengthen measures, then the regulation of behavior is futile. Trump seems to care little. 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's shares rather than fulfilling their supervisory responsibilities. Let's hope that David Sacks, Trump's appointed cryptocurrency chief, will deliver on his promise to strengthen consumer protection.
At the very least, a basic requirement for all politicians is that they must deposit all their investments in "blind trusts" on the day they take office, and that their relatives' investments should also be restricted. Here, "blind trusts" refers to a type of asset management in which politicians hand over their property to third parties to manage their property, thereby avoiding any influence on investment operations to prevent officials from using their power for personal gain. This is the view put forward by Garen Markarian, a corporate governance expert at the University of Lausanne. Worryingly, the prevailing attitude among the elite is one of less oversight, not more scrutiny of politicians and their investments.
While Trump is joining forces with the crypto community to lash out at the so-called “de-banking,” Musk, who has been allowed to set his own rules, is using DOGE as a weapon against the government. This is classic overconfidence, especially given the president’s previous conviction for fraud. It also sends a signal of arrogance to ordinary people, showing that the law will be more lenient towards privileged people with inside information. The regulatory chaos in the crypto space is already clear, but there is little sign of action to clean it up.
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