Concerns raised as Trump’s memecoin surges, making $11.4M in fees

Donald Trump’s $TRUMP memecoin has reportedly raked in at least $11.4 million in fees for organizations connected to the president. According to Bloomberg, the token quickly became a valuable product in the crypto world, with its market cap soaring past $14 billion shortly after launch.

The memecoin made its debut on January 17 on the decentralized finance (DeFi) platform Meteora, running on the Solana blockchain. It was backed by CIC Digital LLC and Fight Fight Fight LLC, two entities with close ties to Trump.

Memecoins like this are usually a mix of speculation and fandom, with some people looking to make a quick profit while others just want to show support for a celebrity or a trending moment in internet culture.

Are there conflicts of interest with Trump’s memecoin?

Analysis by crypto risk modeling firm Gauntlet suggests that Trump’s memecoin could bring in billions for the 47th president. But while that kind of windfall sounds great for him, it’s also raising concerns about potential conflicts of interest.

The groups behind the TRUMP memecoin actually control 80% of its supply, which is currently locked in liquidity pools and will gradually unlock over the next three years.

According to Tarun Chitra, CEO of Gauntlet, the millions in fees these entities are earning come from the liquidity they’ve provided to keep trading active.

Liquidity pools let people buy and sell the memecoin straight from their wallets, with a small fee collected on every transaction. And those fees appear to be tallying up fast.

Chitra added that the token has “basically generated fees on the order of what the best day of memecoins was.

“For Pump.fun, there were many memecoins that were earning fees versus here it’s just one coin.”

Earlier this month, First Lady Melania Trump also launched her own coin, which caused the $TRUMP token to spiral. As a result, the coins have caught the attention of Senator Elizabeth Warren and Representative Jake Auchincloss, who have asked multiple regulators to look into the propriety of memecoins. The pair wrote: “We write with deep concern about the decision by President Trump and First Lady Melania Trump to launch two meme coins, $TRUMP and $MELANIA, that allow them to earn extraordinary profits off his Presidency.”