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Trump meme coins raise money. They also buy access.

Meme coins have become a profitable new business for President Donald Trump鈥檚 family company. The Trump-branded digital tokens are part of a broader push by The Trump Organization 鈥� which is managed by Mr. Trump鈥檚 sons, and in which the president holds a majority ownership stake 鈥� into cryptocurrency, a form of digital money that Mr. Trump once derided but now embraces.

Ahead of his Jan. 20 inauguration, Mr. Trump began promoting two meme coins, $TRUMP and $MELANIA, to his supporters. $TRUMP鈥檚 market value spiked after its launch to $14 billion; it is . The token got a boost late last month when it was announced that the top 220 holders of the coin, in value, would be invited to with the president at Trump National Golf Club in Virginia, with the top 25 also invited to a 鈥淧rivate VIP Reception鈥� with Mr. Trump. The contest ended Monday; while the identities of most of the winners were not clear, indicated that many of them were likely foreign nationals.

Democrats have criticized the Trump family鈥檚 various cryptocurrency ventures as selling access to and profiting from the presidency. Sens. Jeff Merkley and Chuck Schumer on May 6 to bar the president, the vice president, administration officials, members of Congress, and their families from issuing or sponsoring crypto coins and currencies.

鈥淐urrently, people who wish to cultivate influence with the president can enrich him personally by buying cryptocurrency he owns or controls,鈥� . 鈥淭his is a profoundly corrupt scheme. It endangers our national security and erodes public trust in government. Let鈥檚 end this corruption immediately.鈥�

With many non-American holders of $TRUMP appearing to be among those who were vying to win dinner with the president, , concerns have arisen about foreign influence 鈥� as well as how invitees will be vetted. The organizers, a Trump-affiliated entity called Fight Fight Fight LLC, said that a background check would be mandatory. Foreigners are legally barred from donating to U.S. election campaigns and candidates.

In a recent Mr. Trump said he wasn鈥檛 profiting from his family鈥檚 cryptocurrency businesses. Asked if he had made money from his meme coin, he said, 鈥淚 haven鈥檛 even looked.鈥� When asked in an interview on May 4 about Democratic lawmakers鈥� accusations, so that China doesn鈥檛, but didn鈥檛 speak to his family鈥檚 involvement.

What is a meme coin?

Meme coins are digital tokens based on popular internet memes. Unlike cryptocurrencies such as bitcoin, meme coins aren鈥檛 forms of money and are marketed as collectibles, similar to baseball cards, that are traded within a dedicated community. But they also double as speculative investments. Their value is highly volatile, even compared with bitcoin.

Dogecoin began as a meme coin that Elon Musk referenced with the creation of the Department of Government Efficiency, or DOGE. Other coins feature cartoon characters or images generated by artificial intelligence. Millions of meme coins are created and traded every year.

How do meme coins generate profits?

Coin issuers earn money on sales and from trading fees. Since they cost virtually nothing to issue, the upside can be substantial, though most meme coins are thinly traded or not at all.

More controversially, speculators who get early access to meme coins that soar in value can sell at higher prices, typically before coins plunge in value. Unlike stocks or other securities, meme coins aren鈥檛 regulated and issuers don鈥檛 have to provide disclosures to buyers. Critics say this allows for market manipulation by insiders who can time their buying and selling.

Traders who bought $MELANIA in the minutes before it was first promoted on social media earned nearly $100 million in profits, . In the minutes before Melania Trump formally announced the token鈥檚 launch on Truth Social on Jan. 19, a small group of traders bought $2.6 million worth of coins. Most were then sold within 12 hours.

The creators of $TRUMP include The Trump Organization and a Wyoming-based group called Celebration Cards LLC, whose ownership is opaque. The Trump-related entities are estimated to have already earned from the sale and trading of the token. The entities also hold 80% of the 1 billion tokens that are being created, a holding potentially worth billions of dollars. Under the issuance rules, these tokens are subject to a lockup period that restricts when they can be sold.

What are the ethical concerns raised by Mr. Trump鈥檚 coins?

Mr. Trump already licenses a range of goods, from books to sneakers, that have generated substantial profits for his political committees and other entities he controls. A digital coin is no different, and while it may not seem appropriate for an acting head of state to make money on the side, it isn鈥檛 clear that any laws have been broken.

Holding an auction for a private reception with the president 鈥� as the $TRUMP contest does for top coinholders 鈥� raises more ethical and legal concerns, however. The Constitution鈥檚 foreign emoluments clause bars presidents from accepting foreign gifts. In his first term, Mr. Trump was accused of violating this law but the Supreme Court dismissed the case after he left office.

Even if a number of the $TRUMP contest winners are U.S. citizens, the auction is offering access to the president based on holdings of an asset issued by his family鈥檚 company. Critics say this amounts to 鈥減ay to play鈥� corruption using an untraceable digital currency.

Republican Sen. Cynthia Lummis of Wyoming, an ally of both Mr. Trump and the cryptocurrency industry, 鈥淭his gives me pause,鈥� she told NBC News, adding that Congress needs to set rules for meme coins and other digital assets. 鈥淭his is the Wild West, and so when I hear things like this, my reaction is, we need to legislate so there are rules.鈥�

Others say that while the meme coin contest may be unseemly, it鈥檚 no different from other fundraising efforts that have promised access to the president. In the 1990s, who had donated to the Democratic National Committee to stay overnight in the White House.

That the $TRUMP holders are putting money into a private company and not into a political committee may be a distinction without a difference, says Carol Goforth, a law professor at the University of Arkansas who studies the regulation of cryptocurrencies. Paying for a dinner seat 鈥渋s the model for campaign finance, and you鈥檇 be naive for thinking that this isn鈥檛 working in a similar way.鈥�

Asked about the contest at the White House briefing Friday, Press Secretary Karoline Leavitt said Mr. Trump 鈥渋s abiding by all conflict of interest laws. The president has been incredibly transparent with his own personal financial obligations throughout the years.鈥�

What other crypto ventures does the Trump family have?

Mr. Trump鈥檚 sons control World Liberty Financial, a cryptocurrency company that launched last year and has marketed a currency called $WLFI. , a digital currency tethered to a traditional currency. Last month, a state-backed investment firm in the United Arab Emirates acquired $2 billion in World Liberty Financial鈥檚 stablecoin. , a cryptocurrency firm that pleaded guilty in 2023 to violations of U.S. federal law and paid a $4 billion penalty.

This transaction has been criticized by Democrats. , Sen. Elizabeth Warren and Senator Merkley warned that World Liberty Financial 鈥渃ould be used as a backdoor for foreign kickbacks and bribes.鈥� They also pointed to possible violations of the emoluments clause because MGX, the Emirati investment firm, has close ties to a foreign government.

鈥淭he deal, if completed, would represent a staggering conflict of interest, one that may violate the Constitution and open our government to a startling degree of foreign influence,鈥� they wrote.

Eric Trump, during a visit to the United Arab Emirates where he promoted World Liberty Financial, denied that he was coordinating with his father. 鈥淭here are no conflicts because I don鈥檛 work with the White House,鈥� he said.

How does the U.S. government regulate cryptocurrency?

As head of the executive branch, Mr. Trump oversees the agencies that regulate finance, including cryptocurrencies. His appointees have taken a far more hands-off approach to the industry than the Biden administration did. For example, and dropped ongoing lawsuits and investigations into prominent cryptocurrency exchanges and trading platforms.

Paul Atkins, the new SEC chair appointed by Mr. Trump and who has previously consulted for the industry, . 鈥淲e鈥檙e seeing a profound shift in outlook鈥� at the SEC, says Professor Goforth.

Similarly, the Department of Justice . An April 8 directive from Deputy Attorney General Todd Blanche instructed prosecutors not to pursue criminal charges involving digital currencies unless they involved criminal organizations, drug cartels, or terrorist groups. Cryptocurrency has become a staple of online scams and extortion rackets.

Congress is in the process of coming up with a regulatory framework for stablecoins, which would represent a victory for the cryptocurrency industry, which has become a significant source of campaign contributions. The Senate Banking Committee voted last month to move the bipartisan GENIUS Act for a full vote. The act, which the Senate is expected to vote on before the Memorial Day recess, would establish clear rules for stablecoin issuers and make it easier to hold and invest in the tokens.

The revelations about the Trump family鈥檚 stablecoin transactions led to calls this week for Democrats to block the bill unless it has stronger anti-corruption provisions. Instead, the legislation proposed by Senators Merkley and Schumer . Its prospects for passage are dim, however, as it is unlikely to attract any Republican support.

Editor鈥檚 note:聽This article, originally published May 10, has been updated May 12 with news that the Trump meme coin contest has ended.