What does this have to do with the Constitution? A lot, I’m afraid.
What does this have to do with the Constitution? A lot, I’m afraid.
This is the third in a series of columns on President Trump’s cryptocurrency venture. See part one and part two.
O n January 17, 2025, Donald Trump took to social media with an announcement that was as dumbfounding in its crassness as it was unprecedented in the history of American presidents-elect — to say nothing of presidents-elect less than 72 hours from being inaugurated to hold the most powerful political office in the world.
In the announcement, Trump urged the public, in the United States and across the world, to buy his new meme coin, $TRUMP. In his four ensuing months in office, the president has made a fortune on these sales. The exact amount is hard to quantify because, as we’ll see, meme coin values fluctuate wildly and Trump has partners in the venture. Still, Forbes has assessed that “it’s safe to assume the president walked away with at least $110 million after tax.” And that was in early April, before some more recent and significant revenue-raising developments.
Much of this haul has come from foreign sources. Just this week, while the president was spinning as a triumph his face-saving retreat from the trade war he’d started with China, an obscure tech company tied to China announced that it would buy a mind-blowing $300 million of Trump’s meme coin. And although investors in these digital tokens may make or lose money — mostly lose because, as we’ll see, meme coin marketing often operates like a pump-and-dump scheme — the marketing of $TRUMP is structured to earn the Trumps a transaction fee: i.e., they make money every time the tokens change hands. They appear to have cleared between $320 and $350 million in transaction fees so far.
Let’s back up to get a handle on what we’re talking about, in terms of both cryptocurrency and constitutional governance.
In crypto parlance, the terms token and coin are often used interchangeably, but they’re not really the same thing. Token is the more general term, referring to a digital asset of some kind; coin is a subset, a digital asset whose backers aspire for it to function like currency. In the first column of this series, I referred to stablecoin, which we’ll discuss more in a later installment. Stablecoin is supposed to function like currency (i.e., it is an attempt to address cryptocurrency’s general weakness as a medium of exchange). Not so in the case of a meme coin.
Despite the name, a meme coin is better understood as a token. In fact, meme coins are even dodgier than most cryptocurrencies because there is little realistic expectation of stable, enduring value. A meme coin is just a token evocative of an event, a person, a movement, a clique, or even a joke — anything that tugs at the emotions. It turns out that many people, mostly fans, are willing to pay for a digital memento that makes them feel like part of a wave, part of a community of the like-minded, often formed ad hoc through the machinations of social media “influencers.”
If you’re buying meme coins as anything other than souvenirs, you’re probably either a shark looking to take advantage of the saps, or . . . one of the saps. That is to say: if you’re buying meme coins as an investment, you better get in early and get out before the emotional wave crests.
What does this have to do with the Constitution? A lot, I’m afraid.
In the great debates at the Philadelphia convention in 1787, nothing more alarmed the Framers than the prospect that a foreign power could purchase or otherwise corrupt the awesome powers they planned to vest in the office of the presidency. And mind you, those authorities are even more immense today because, over the past century, the administrative state and the effects of modern media have shifted power from Congress to the executive branch.
A few days ago, in addressing the president’s disgraceful proposal to accept a $400 million luxury aircraft as a gift from the jihadist despots in Qatar, I discussed the Constitution’s emoluments clause (Article I, Section 9, Clause 8). It prohibits all who hold federal offices of public trust from accepting gifts “of any kind whatsoever, from any King, Prince, or foreign State.” Hamilton explained that the historical “prevalency of foreign corruption of republican governments” cried out for this restriction.
And just to be clear, a gift can take all manner of forms (which is why the Constitution says “of any kind whatsoever”). Sometimes, gifts are camouflaged as commercial transactions. But when party A intentionally and vastly overpays for the nominal value of what party B is “selling,” that is a gift.
With respect to the president in particular, besides high crimes and misdemeanors, the Framers made treason and bribery separate grounds for impeachment (Article II, Section 4). With treason, the fear was that the power of the presidency could be put in the service of a foreign enemy. With bribery, the fear was that wealthy people or entities — and especially foreign powers and their agents — could suborn the power of the presidency to their own advantage.
Fledgling 18th-century America was existentially threatened by foreign powers. Modern America is far more established and secure, yet the specter of foreign corruption remains. Unsurprisingly, modern statutory law is informed by the same concerns that animated the Framers during the Constitutional Convention. Besides criminal laws against bribery and gratuities, this is seen in campaign finance laws, which criminalize the acceptance of donations from foreign sources by political campaigns (including for such campaign projects as inauguration funds).
Obviously, we must be concerned about anyone, including Americans, who might try to curry favor with a sitting president by finding ways to pay him lots of money. But the greatest threat remains foreign corruption. In the first column of this series, with the analogous backdrop of the Clinton Foundation and the Biden family influence-peddling business, I surmised that the Trump cryptocurrency enterprise functions as an avenue for foreign powers, rent-seekers, and other supplicants to line the president’s pockets with gargantuan sums of money.
The meme coin scheme is a deeply disturbing illustration of this.
Riding the wave of passionate MAGA triumphalism just three days before returning to the Oval Office, Trump kicked off sales of the meme coin by posting about it on his social media accounts. He described $TRUMP as “my NEW Official Trump meme” and encouraged followers to join “my very special Trump community” by acquiring — at gettrumpmemes.com — the token that “celebrate[s] everything we stand for: WINNING!” Meme coins are digital, but they are generally associated with imagery. Evoking memories of last July’s harrowing assassination attempt against him in Butler, Pa., the president-elect’s $TRUMP post depicted Trump raising his fist in defiance, with the summons to “FIGHT FIGHT FIGHT” superimposed right above Trump’s singular signature.
The president is an obsessive social media user. He follows a pattern: Most of his posts first appear on his Truth Social platform, which has just 2 million active users. That’s comparatively tiny as social media platforms go, but Trump is financially invested in the success of Truth Social, and if he didn’t post there, it would vanish (and, with it, $2.6 billion of the president’s net worth). A bit later (generally within six hours), Trump’s Truth Social posts are reproduced on X (formerly Twitter), whose user base, at well over 600 million (and close to 300 million daily users), is orders of magnitude larger. Such reproduced posts appear on an X account, @TrumpDailyPosts, that has 2.3 million followers. For the rollout of $TRUMP, however, the president-elect pulled out all the stops: He posted the announcement that the meme coin was for sale on his personal X account, @realDonaldTrump, which has nearly 105 million followers.
Or is it 105 million customers?
The $TRUMP meme coin is separate from World Liberty Financial, the main Trump cryptocurrency enterprise we’ve been discussing. Instead, $TRUMP is the brainchild of Trump’s longtime friend and business partner Bill Zanker, the co-author of the now-president’s 2007 book, Think Big and Kick Ass in Business and Life. Zanker helped incorporate a company called Fight Fight Fight LLC in Delaware, which produced $TRUMP through a blockchain platform called Solana.
For his part, Trump started two companies denominated “CIC,” which sure sounds a lot like shorthand for “commander in chief” — a vital constitutional responsibility that is coming to resemble a private corporate asset. He used one of these companies, CIC Ventures LLC, to hawk Bibles, books, watches, gold sneakers, guitars, and other commodities. (Since being elected, Trump is often heard in media ads selling his wares.) He uses the other, CIC Digital LLC, for $TRUMP.
A billion $TRUMP digital meme coins were corporately issued, but only 200 million of them were put into circulation. The remaining 800 million were “locked,” to be released at specified intervals over about three years. The locked reserve is owned by Trump, Zanker, and their partners, mainly through a business entity that the president owns (although it is managed by his elder sons, Don Jr. and Eric, while he is president).
Until they are made available for trading, the value of the 800 million $TRUMP tokens that are in reserve depends on the value of the tokens that are being actively traded. But remember what we said before about transaction fees: regardless of whether the tokens rise or fall in value, the president and his partners earn a fee every time the tokens change hands. The tokens are speculative; the churn is where the steady money is.
When first released, on January 18, the tokens were marketed at 18 cents apiece. But instantly, the price surged 300 percent. By the afternoon of January 19, they peaked at over $75.35, an increase of 41,800 percent above the launch price. On paper, the market capitalization of $TRUMP soared to $14.5 billion. On paper, the 800 million tokens in reserve, most of which were owned by the president, were valued at over $60 billion. The paper, of course, is fictional: The reserve was locked, and if it were dumped, the value would have crashed. But even a fraction of $60 billion is a lot of money. As this is written, $TRUMP is trading at $13.25, down 82 percent from its peak — valuing Trump’s reserve at $10.6 billion. But that’s still just a paper fiction. If the locked tokens were released for sale, the market would be flooded, and the price would plummet back to pennies.
Plenty of sharks cashed in on the $TRUMP rollout. For example, the New York Times reported on one unidentified trader who spent over million dollars to buy 5,971,750 tokens just two minutes after Trump’s January 17 announcement on X. The trader held on for two days while the price soared, then sold his stash at a profit of $109 million.
The Times notes that at least some of the early traders, who made a killing, appear to be from China. Meantime, as invariably happens, the slower investors, who were lured in by the desire to feel like part of the phenomenon, bought after the price had been pumped up and the sharks were dumping their tokens. Estimates vary, but almost 800,000 user accounts (known as “wallets,” a digital repository of a user’s crypto) have lost nearly $4 billion in the aggregate.
After it hit its fleeting high, $TRUMP crashed, losing close to 90 percent of its value. This ran the potentially humiliating risk that it could be wiped out — because of the “flooding” dynamic mentioned above. In mid-April, the coin was facing its first “unlock” date: Of the 800 million tokens held in reserve, 40 million were to be released. As the unlock period approached, $TRUMP was trading for just $8 a token, and nearly 200,000 traders had abandoned it entirely. (There were 637,000 unique holders, down from a high of 817,000 shortly after the January launch.) As one analyst put it, putting another 40 million tokens in circulation when the market for the existing 200,000 was already cratering would send the “price into a death spiral.”
The president had posted a few times about the meme coin, but its value slid nonetheless. With the unlock period approaching, it was time for drastic measures.
On April 19, the Times reports, a post on an anonymous X account announced that “President Trump plans to host a dinner for large token holders of $TRUMP coin” and that his minions were working on a web page for it: trumpdinner.gettrumpmemes.com. This leak prompted a mini-rally: the price of $TRUMP rose 12 percent. It was the harbinger of a surge. Some Trump fans thus bought tokens to position themselves in the competition to dine with their hero, but savvier traders sensed an opportunity: to dump the deflated tokens they were still holding at higher price, and to buy more tokens to profit by selling during the surge.
On April 23, the anticipated website went live, with the president’s announcing a contest:
HAVE DINNER WITH PRESIDENT TRUMP — The most EXCLUSIVE INVITATION in the World. Only for the TOP 220 $TRUMP Meme Coin Holders.
President Donald J. Trump is Known as the ‘Crypto President”! At this Intimate Private Dinner, Hear First-Hand President Trump Talk about the Future of Crypto.
It would work like this: The top 220 holders of $TRUMP would be invited to a dinner with the president at his golf club in Virginia. The top 25 would gain access to a “Private V.I.P. Reception” with the president and — unambiguously putting the presidency in the service of this enterprise — these heaviest investors would also get a special White House tour. Finally, the top four $TRUMP holders would “receive the Magnificent Trump Tourbillon Watch” — of which “there are only 147,” with the president himself owning “watch #1.” The contest would work like an auction: There would be a leaderboard, and as purchasers accumulated $TRUMP, they would see their user accounts rise in the standings — a gimmick to prompt bidding wars that inflate would inflate the price.
The contest ignited a frenzy of buying, adding billions of dollars, on paper, to the overall value of $TRUMP controlled by the president and his partners. This generated about $1.3 million in transaction fees. While meme coin transactions are publicly anonymous, the $TRUMP team knows who the big players are. (How else could they clear them for a private dinner, for a select few, a White House tour?)
The contest closed on Monday of this week. Between the April 23 announcement and the May 12 close, the winners spent about $148 million to win an invitation to dine with the president of the United States.
Between the bidders who went public and the overall buying patterns (some purchasers, for example, bought on crypto platforms that do not serve U.S.-based users), several media outlets have noted that many of the biggest $TRUMP holders are non-Americans. The top holder in the contest appears to be Chinese billionaire Justin Sun. The wallet of the winner is called “SUN” and is owned by a crypto exchange called HTX that is based in the Seychelles. Sun is a member of HTX’s global advisory board. He is also one of the biggest investors in Trump’s World Liberty Financial venture — having purchased $75 million of its cryptocurrency ($WLFI). At the same time, he has been pushing for the new administration to deep-six a fraud case the Securities and Exchange Commission brought against him during the Biden administration. The Trump SEC has convinced a judge to pause proceedings in the case.
Other contest winners appear to be from Singapore, Hong Kong, Australia, and elsewhere.
Once the contest ended, fears that $TRUMP would collapse took hold yet again. The token dropped 6.5 percent right after the winners were announced. And because the standings were based on average weighted holdings during the contest, some of the slyer winners have already sold their tokens — i.e., they held heavy $TRUMP stashes for some of the three weeks, enabling them to stay on the leaderboard, but did not miss the opportunity to cash out at the contest-inflated price.
But now, a new development.
Late on Tuesday, the Times reported that a foreign tech company with a Chinese subsidiary has secured an astonishing $300 million in funding to buy $TRUMP meme coins.
The company, GD Culture Group, is an e-commerce business that operates on TikTok, the China-controlled video-sharing platform. TikTok, you may recall, is no longer supposed to be China-controlled because of a divestment statute that Congress enacted last year and that the Supreme Court upheld just three days before Trump’s inauguration. But the president has unconstitutionally declined to execute that law.
GD Culture Group is a public company, which trades on the Nasdaq. Its Chinese subsidiary is called Shanghai Xianzhui. This subsidiary is subject to Chinese laws that require Chinese companies to assist the communist regime as directed.
According to its filings, GD Culture Group has just eight employees and generated zero revenue last year. Only last month, the company disclosed that it had failed to meet certain financial benchmarks necessary to keep its Nasdaq listing. Yet it has now somehow raised $300 million by selling its stock to an unidentified entity formed in the Virgin Islands — where, as the Times explains, investors seeking to maintain anonymity can easily set up shell companies. And this week, just as Trump negotiated a face-saving retreat on tariffs with Xi Jinping’s government, the China-tied company has announced that it believes the best use of its newfound wealth is to buy President Trump’s meme coins.
To put it starkly, an obscure company with no apparent revenue-generating operations but with a partner accountable to the Chinese government has obtained $300 million from an unidentified source and has decided to pay it to the president of the United States — ostensibly by “investing,” through the president’s partners, in digital tokens that have sharply declined in value and may, in the foreseeable future, be worthless.
Not quite what the Framers had in mind.