The TRUMP memecoin becomes a major political obstacle for American crypto regulation. Two senators demand an SEC investigation at the very moment the Senate is trying to save the CLARITY Act
The TRUMP memecoin becomes a major political obstacle for American crypto regulation. Two senators demand an SEC investigation at the very moment the Senate is trying to save the CLARITY Act before its August break. The debate no longer only concerns the nature of the token. It directly touches on White House conflicts of interest.
Elizabeth Warren and Richard Blumenthal ask the SEC to investigate the presidential memecoin. Their offensive extends the already ongoing standoff over the CLARITY Act, whose adoption now depends as much on ethical rules as on technical issues regarding crypto regulation.
In their letter addressed to SEC Chairman Paul Atkins, the two senators mention nearly one million crypto wallets that have collectively lost about $3.81 billion since the launch of TRUMP. They accuse Donald Trump of actively encouraging his supporters to trade the token and ask the regulator to check if fraud or illegal enrichment occurred. At this stage, these are political accusations and a request for an investigation, not a judicial conclusion.
TRUMP was launched on January 17, 2025, three days before the presidential inauguration. Donald Trump later promoted it on his X account. According to figures cited by the senators, the president would have made $636 million from the operation, while a large part of the crypto buyers who arrived later suffered heavy losses.
The case remains legally complex. The SEC has already indicated that memecoins usually do not constitute financial securities. Nevertheless, an investigation could examine other issues, such as communication to investors, organization of sales, or the possible existence of deceptive practices. Thus, the debate goes beyond the simple classification of the token.
Secure your cryptos with SafePalThis link uses an affiliate program.The timing makes this new offensive particularly sensitive. The Senate must suspend its work on Friday, August 7 for its summer break. Without quick progress, the CLARITY Act risks slipping into a period dominated by the November elections, where finding a bipartisan compromise will become even more difficult.
On substance, the text aims to clarify the allocation of powers between the SEC and the CFTC. It also provides rules for crypto platforms, protection of client funds, and certain actors in decentralized finance. But these goals are now overshadowed by a more direct question: can a president financially participate in the market he himself helps regulate?
This question intensified after the collapse of Trump-related crypto tokens. The drop in TRUMP is no longer just the classic story of a speculative asset. It becomes a concrete argument for elected officials demanding stricter limits on the crypto activities of public officials.
The White House is therefore considering a new ethical compromise. A previous version prohibited senior officials and their spouses from issuing or promoting certain digital assets. However, it did not cover all family members. It also entrusted rule enforcement to the Department of Justice, an option considered insufficient by several Democrats.
The paradox becomes difficult to circumvent. The CLARITY Act seeks to offer the crypto sector predictable rules. But its adoption now depends on guarantees designed around the financial interests of a single man. The TRUMP memecoin acts almost like a living amendment, impossible to remove from the debate.
For the industry, a failure would have immediate consequences. Without a new law, the SEC would continue to develop its own regulatory framework through administrative decisions, exemptions, and interpretations. This method might provide some answers but would remain more fragile than a law passed by Congress.
The supporters of the text must therefore choose between speed and credibility. A compromise too weak could be presented as protection granted to the president. Conversely, rules that are too strict risk losing the support of the White House and some Republicans.
The decisive battle over the CLARITY Act ultimately no longer only concerns the SEC, the CFTC, or the platforms. It concerns public trust. As long as Washington does not clearly separate the presidential function from private crypto interests, Donald Trump’s concessions are likely to remain insufficient. The TRUMP memecoin could then cause a reform awaited by the whole industry to fail.
