When Donald Trump won the 2024 presidential election, the crypto industry rejoiced. Years of regulatory hostility, especially from the Gary Gensler-led Securities and Exchange Commission, were history. Bitcoin surged to $109,000, a record at the time, and crypto’s future seemed bright.
Today, it’s a different story. From a decentralized finance platform associated with Trump to the laughably corrupt $TRUMP memecoin, the president’s blatant conflicts of interest are undermining crypto’s long-term credibility and growth. We need Trump to be a pro-crypto policy leader, not a shady crypto entrepreneur profiting from his position.
Trump’s grifts threaten to reduce confidence in both retail and institutional investors, encourage copycat grifters, and drive harsh regulatory backlash. If crypto leaders don’t hold Trump accountable and distance ourselves from his fraudulent behavior, we risk losing the little legitimacy we have.
For starters, crypto leaders and investors should stop engaging with the people and projects that support Trump’s grift. We should also demand clear ethics rules in Congress and the executive branch, particularly around endorsements, campaign finance, and transparency around crypto holdings. Politicians should be required to disclose their digital asset holdings, undisclosed promotional activity should be banned, and formal ethics complaints should be filed if conflicts of interest are identified.
These reforms should be made, in part, because Trump’s position on crypto has fluctuated so wildly. Initially, he was skeptical about the industry. In 2019, he tweeted that he was “not a fan of Bitcoin and other cryptocurrencies.” He told his Treasury Secretary Steven Mnuchin to “go after bitcoin,” and Mnuchin eventually proposed controversial wallet surveillance rules.
Then came the switch.
After leaving office, Trump launched his own NFTs in 2022. As crypto became a wedge issue in the 2024 election, he courted crypto-minded voters by promising to make the U.S. the “crypto capital of the world.” He accepted millions in crypto donations for his campaign.
The crypto industry was too ecstatic about these changes to notice that Trump’s transformation from anti-crypto regulator to die-hard supporter was shallow and opportunistic. Imagine their surprise when he flips on them again.
The good: Court cases dropped and crypto-savvy appointments
To Trump’s credit, his second term has brought a more open-minded approach to crypto. His administration has dismissed several Biden-era lawsuits against crypto firms, including high-profile cases against Coinbase and Ripple, in which the companies were sued based on outdated and misapplied securities laws.
Trump has also made crypto-savvy appointments, such as former Andreessen Horowitz policy chief Brian Quintenz to lead the Commodity Futures Trading Commission, former SEC Commissioner and free-market proponent Paul Atkins as SEC chair, and Silicon Valley venture capitalist David Sacks as “crypto and AI czar.”
Trump has also established crypto working groups and task forces and announced initiatives like the Strategic Bitcoin Reserve.
This shift toward clear and fair regulations is welcome after many years when crypto occupied legal gray areas. In the Bay Area, home to crypto stalwarts such as Coinbase, Kraken, and Anchorage that represent hundreds of billions of market value, regulatory clarity could help establish the industry as a stronger pillar of the local economy.
The bad: Glaring conflicts of interest
Despite these positives, Trump’s corrupt personal crypto ventures have undermined the industry’s legitimacy.
World Liberty Financial, the decentralized finance platform closely linked to Trump, has raised $550 million off his popularity. His family owns 60% of the entity and has raked in more than $400 million in fees. The platform’s stablecoin, USD1, was used by Abu Dhabi investment firm MGX to invest $2 billion in crypto exchange Binance, sparking justifiable concerns of foreign influence.
The $TRUMP memecoin has been even more problematic. While 764,000 retail investors have lost billions, the Trump family and partners have earned more than $320 million in trading fees. Trump recently ran a pay-to-play promotion, inviting the top 220 $TRUMP holders to an exclusive dinner with him, which was underwhelming and led to a dump of his token the next day.
These entanglements have made it harder to pass critical crypto legislation.
The GENIUS Act — which aims to provide comprehensive stablecoin regulation, such as strict reserve requirements for issuers and enhanced consumer protections — passed a Senate vote May 19, but many senators have serious concerns about favoritism and foreign influence stemming from Trump’s personal stake in crypto projects.
What should be done?
While the GENIUS Act strengthens transparency and consumer protections for stablecoins, we need additional legislation that better defines tokens as securities or commodities and allows builders to innovate without the constant threat of legal action.
Industry leaders must publicly confront grifters, including the president, and hold them accountable. Investors and companies that want to maintain their legitimacy should refrain from investing in Trump’s coins, or the coins of those who support him. We should push for ethics reforms that compel politicians to disclose their digital asset holdings, ban promotional activity of crypto projects, and allow for the filing of ethics complaints when conflicts of interest arise. If we want our industry to gain mainstream legitimacy, we must condemn and distance ourselves from all scammers and criminals, even if they are in positions of power.
Finally, crypto leaders should double down on building products that espouse the principles of crypto: decentralization, resistance to censorship, and transparency. While regulatory clarity is needed, the true promise of crypto lies in being independent of any single actor or government.
Only then can we achieve both fair regulations and the industry credibility we’ve been striving for.
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Mike Chan is managing partner of Deep Ventures, a pre-seed venture capital fund. He has operated in the crypto space since 2018 and bought his first bitcoin in 2013.