Ex-CFTC Chair warns Trump’s crypto ventures pose ‘unprecedented’ conflicts of interest

Former US CFTC Commissioner Timothy Massad believes Trump’s crypto projects, like his meme coins and World Liberty Financial, pose serious risks of conflicts of interest.

According to Massad, the president’s crypto works are largely similar to pump-and-dump schemes, raising questions about Trump’s intentions and ethics.

Trump launched his meme coin before taking office, and his family still has a giant stake in WLFI

Trump isn’t the first president to come to office with side businesses or multiple assets. But, to preclude any conflict of interest, most former presidents, like Jimmy Carter and George W. Bush, arranged to place their holdings in a blind trust. In contrast, Donald Trump handed day-to-day management to his sons but kept all his shares in his businesses during his first term.

Despite facing criticism for violating traditional norms of conflict of interest, Trump did so again before taking office for his second term. This time, however, his conflicts of interest are larger than in his first term. In addition to his real estate projects, Trump has ventured into crypto.

Days before being sworn in, Trump released his personal meme coin, which began to gain traction, going from less than $10 to above $75 in less than a week after launch. Additionally, by February’s start, Trump had earned nearly $100 million from token trading, despite criticism from ethics experts. However, the token has tanked in value since and is now worth just $11.37.

Aside from his meme coin project, the Trump family still has a stake in World Liberty Financial, about 75% of the platform’s net revenue, and a 60% stake in the holding company.  While Trump does not have any position in WLFI, his name and those of his three sons are on the whitepaper’s list of supporting teams as “Chief Crypto Advocate.”

Massad believes Trump’s crypto projects may add no value to people

The Trump administration has been actively involved in crypto policy development and even agreed to establish a BTC reserve and digital asset stockpile. However, crypto community members have questioned whether Trump means well for the industry or if he’s just looking for more ways to propel his projects. 

Some have pointed out that Trump’s crypto projects and political influence are now seemingly intertwined, presenting huge conflicts of interest.

Tim Massad even commented, “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.” 

In his view, a US president should not participate in any economic ventures while in office, especially those that pose blatant conflicts of interest, given that crypto regulation is still a top priority for the administration.

He added that he does not see any of Trump’s crypto businesses as valuable to people, saying that the projects “all just have a character of taking advantage of people.”

Before WLFI was launched, Alex Miller, CEO of Hiro, a Web3 platform, called the project an “obvious pump scheme.” Similarly, influential figures Mark Cuban, Max Keiser, and Anthony Scaramucci pushed back against Trump’s decision to proceed with WLF’s token sales.

To add to Trump’s controversial projects, TRON founder Justin Sun invested in WLFI, buying $30 million worth of WLF tokens in November, and got recruited as an advisor. Then, he invested another $45 million in the project on Trump’s inauguration. 

Sun’s involvement in WLFI came under heavy scrutiny,  with some suggesting that his past run-ins with the SEC motivated his contributions.

Cryptopolitan Academy: Tired of market swings? Learn how DeFi can help you build steady passive income. Register Now