In an unique interview with BeInCrypto, former US CFTC Commissioner Timothy Massad explains how President Trump’s crypto ventures and political energy have considerably overlapped in his first two months on the White Home.
Shortly earlier than assuming workplace for the second time, US President Donald Trump dove head-first right into a flurry of crypto experiments. From endorsing World Liberty Monetary (WLFI) to launching his meme coin, Trump is elevating critical considerations over conflicts of curiosity. Tim Massad, the twelfth CFTC Chairman, who served below Barack Obama, shares his ideas.
A Historic President For Many Causes
Earlier than assuming his first time period in workplace in 2016, President Trump broke with trendy precedent by departing from established conflict-of-interest norms. An actual property mogul with a trademark for a final title, Trump can be getting into the Oval Workplace because the chief of a multi-billion greenback empire.
Whereas former presidents like Jimmy Carter and George W. Bush took measures to separate themselves from their companies by putting their property in a blind belief, the sitting President took a unique strategy.
As an alternative, Trump handed day-to-day administration selections over to his sons however didn’t divest in his possession stake.
Although he obtained a lot backlash throughout his first time period over battle of curiosity considerations, Trump refused to relinquish possession of the Trump Group earlier than assuming workplace for the second time.
Nonetheless, the ‘conflict of interest’ has reached a brand new degree this time, in comparison with 2016. Right this moment, his ventures lengthen far past actual property. Trump has now secured a major footing within the crypto business.
Given Trump’s favorable stance towards digital asset coverage improvement, gamers inside and out of doors the business have begun to wonder if his selections are based mostly on the sector’s finest pursuits or are designed to profit his personal ventures.
How Deep is Trump’s Involvement in World Liberty Monetary?
Although Trump doesn’t have a direct function in WLFI, he seems on the whitepaper’s record of supporting groups as “Chief Crypto Advocate.” His three sons, Eric, Donald Jr., and Barron, are additionally on the record.
Studies additional unveiled that the Trump household holds a 75% stake within the platform’s web income and a 60% stake within the holding firm. On the identical time, Trump and his associates personal 22.5 billion of the corporate’s tokens.
For former CFTC Commissioner Tim Massad, regardless of Trump’s casual function in WLF’s governance, his stake within the platform’s efficiency raises critical conflicts of curiosity.
“I think it’s unprecedented and plainly wrong for a President of the United States to engage in commercial ventures or have his family and associates engage in commercial ventures that can be directly influenced by the policies he adopts as President or the statements he makes about those policies,” Massad advised BeInCrypto.
In the meantime, the tokens themselves are non-transferrable, limiting monetary flexibility. Although the venture goals to offer token holders entry to a variety of DeFi-related services, it has but to launch them. Within the meantime, token holders should wait till the time comes to make use of their tokens.
“I have yet to see any real business case or utility that’s of value to people who invest. So I think it all just has a character of taking advantage of people,” Massad added.
The business has additionally grown weary over how WLF and different Trump-endorsed tasks might be used to achieve the President’s favor.
Business Leaders Voice Considerations Over World Liberty Monetary’s Legitimacy
Shortly earlier than Trump launched World Liberty Monetary, many outstanding figures within the crypto sector warned that the venture may trigger Trump additional authorized troubles. In the meantime, Alex Miller, CEO of Web3 platform Hiro, described the venture as an “obvious pump scheme.”
In the meantime, Alex Miller, CEO of Web3 platform Hiro, described the venture as an “obvious pump scheme.”
Different business leaders, comparable to Mark Cuban, Max Keiser, and Anthony Scaramucci, additionally criticized Trump’s choice to proceed with WLF’s token gross sales. Trump’s involvement within the venture heightened fears that crypto’s fragile public picture and controversial repute can be smeared additional.
Massad agreed with this final level, including that crypto coverage improvement is alive and nicely at this time greater than ever. The continued improvement of stablecoin laws, open talks of a nationwide crypto strategic reserve, and a Senate-driven digital asset working group are solely a few of the present institutional initiatives.
“He, the Trump Organization and his family members should not be engaging in commercial ventures that pose such blatant conflicts of interest, given the fact that crypto regulation and things like a potential Bitcoin reserve are important policy issues today. A US president shouldn’t be engaging in these things at all, in my view,” Massad stated.
Because the venture’s launch six months in the past, a number of examples validating these considerations have emerged. Essentially the most notable one has targeted on Tron founder Justin Solar.
Justin Solar’s Controversial Funding in WLFI
TRON founder Justin Solar grew to become World Liberty Monetary’s largest investor in November after shopping for $30 million value of WLF tokens.
The transfer was extremely controversial. Regardless of Trump’s endorsement, WLFI struggled to satisfy its $30 million fundraising goal throughout its first public sale. The token’s availability was restricted, excluding normal buying and selling and limiting purchases to non-US and accredited US traders.
Solar’s funding turned WLFI’s luck round. Quickly after that, he additionally grew to become one of many venture’s advisors. Then, on the day of Trump’s inauguration, Solar invested a further $45 million within the venture, bringing the entire sum to $75 million.
This funding introduced various levels of scrutiny. Whereas some questioned his fast transition from investor to advisor, others pointed to Solar’s previous as a possible motive for his contributions.
In March 2023, the SEC filed fraud expenses and different securities legislation violations in opposition to Solar and his corporations. This regulatory baggage has led some business leaders to query the knowledge of his affiliation with World Liberty Monetary.
In the meantime, Tron’s worth soared following Solar’s newest WLF funding. Tron, which had been experiencing lagging costs up till that time, was in a position to jumpstart its buying and selling actions.
Nonetheless, these conflicts of curiosity are usually not simply restricted to Solar’s funding.
Potential Binance Stake and Additional Conflicts
Lower than two weeks in the past, studies surfaced that the Trump household had held talks to amass a monetary stake in Binance’s US division. Although Binance’s founder, Changpeng Zhao, discredited these studies, flirting with the idea comes simply.
Zhao may additionally profit from an settlement. In 2023, he pleaded responsible to federal expenses for failing to implement satisfactory anti-money-laundering measures at Binance.
Following his plea, Zhao resigned as Binance’s CEO. Motive-driven speculations level towards the potential for a possible presidential pardon.
For Massad, maneuvers like these are pure when a president instantly entails himself in crypto ventures.
“I think there is a huge risk of conflicts of interest and corruption by virtue of the President and people associated with him selling crypto assets—whether that’s through World Liberty Financial or the meme coins. It creates the potential for ongoing conflicts, because people who might want to curry favor with the administration could buy the coins,” Massad advised BeInCrypto.
All of the whereas, Trump advantages his crypto ventures each time he makes a pro-crypto announcement.
Is Trump Manipulating the Crypto Market?
Every week into March, Trump signed an government order to ascertain a Crypto Strategic Reserve and a US Digital Asset Stockpile. In his authentic announcement, Trump stated the reserve would come with Bitcoin, Ethereum, and altcoins like XRP, ADA, and SOL.
The crypto market responded instantly, with all 5 cryptocurrencies posting robust positive factors. But, Trump’s announcement shortly raised considerations over potential market manipulation.
With Bitcoin, Ethereum, and XRP in its treasury, WLF’s holdings grew in worth as these property appreciated. This development may have boosted investor confidence, resulting in greater demand for WLF tokens.
The crypto market’s general surge and a focus to Trump-related tasks additionally generated larger investor curiosity in WLF, contributing to its worth appreciation.
In the meantime, Trump’s meme coin surged following the President’s reserve announcement. Whereas TRUMP’s worth stood at $13.55, with a buying and selling quantity of virtually $1.2 billion on March 2, these numbers surged to $17.46 and $3.6 billion, respectively, following the information a day later.
On March 4, TRUMP’s worth and buying and selling quantity plummeted under the numbers they registered solely two days earlier.
“I think the meme coins have looked like a classic pump-and-dump scheme or money grab. I don’t think the issue should be, why not let people invest in these things if they want to? Of course they should have the right to invest in whatever they want. The issue is the propriety of the President of the United States selling things that capitalize on his being the President,” stated Massad.
Even Ethereum Co-Founder Vitalik Buterin touched on the damaging results of political meme cash in a social media put up printed 5 days after TRUMP’s launch.
“Now is the time to talk about the fact that large-scale political coins cross a further line: they are not just sources of fun, whose harm is at most contained to mistakes made by voluntary participants, they are vehicles for unlimited political bribery, including from foreign nation states,” Buterin stated.
Given Trump’s energetic participation within the crypto business over the previous a number of months, a significant query stays: Why hasn’t Trump been held accountable over these obvious conflicts of curiosity?
The reply stays quick and bitter: He can’t be.
Can Trump Be Held Accountable?
The potential conflicts of curiosity arising from Donald Trump’s involvement within the cryptocurrency business have drawn the eye of assorted political figures, notably these targeted on authorities ethics and oversight.
US Senator Elizabeth Warren has been probably the most vocal opponent of Trump’s dealings within the crypto business.
A day earlier than the White Home Digital Property Summit, Warren despatched an in depth letter to Trump’s crypto czar, David Sacks.
“I write today to request information about how you, as President Trump’s ‘Crypto Czar,’ have addressed your conflicts of interest, and how you will prevent the President and other private individuals from directly profiting off of the Trump Administration’s efforts to selectively pump the value of certain crypto assets, drop crypto asset-related enforcement actions, and deregulate the crypto asset industry. These actions have the potential to benefit billionaire investors, Trump Administration insiders, and speculators at the expense of middle-class families,” Elizabeth Warren wrote.
Nonetheless, not a lot else might be accomplished past letters that demand responses and clarifications from the Trump administration.
The Authorized Loophole
US Presidents are largely exempted from battle of curiosity provisions. This exemption has been based mostly on authorized interpretations that argue these legal guidelines may impede the President’s skill to satisfy their constitutional duties.
“The problem is, the POTUS is not subject to the conflict-of-interest laws that apply to most other executive branch officeholders. There is the Foreign Emoluments Clause in the Constitution, which prohibits accepting gifts from foreign countries. There’s also a domestic clause that prohibits accepting gifts from the government. But beyond that, he’s not subject to the usual conflict-of-interest standards. So, it’s unfortunate that we don’t have those standards applicable to a president. I think, had any other president done these things, there would be far more outrage,” Massad advised BeInCrypto.
Given the authorized circumstances, public scrutiny and political strain are one of the best methods to carry a president accountable for potential conflicts of curiosity.
But, regardless of the authorized exemptions for sitting presidents, the moral implications of Trump’s crypto dealings stay plain.
Because the traces between political energy and private revenue proceed to blur, the need for clear moral requirements, even with out authorized mandates, turns into more and more pressing.
Failing to take action would possibly erode public belief within the crypto business, producing probably irreversible penalties.
Disclaimer
Following the Belief Challenge tips, this function article presents opinions and views from business consultants or people. BeInCrypto is devoted to clear reporting, however the views expressed on this article don’t essentially replicate these of BeInCrypto or its employees. Readers ought to confirm data independently and seek the advice of with an expert earlier than making selections based mostly on this content material. Please observe that our Phrases and Circumstances, Privateness Coverage, and Disclaimers have been up to date.
