SEC fraud investigation calls for TRUMP coin after plunging 98%

Senators ask SEC to investigate alleged fraud in TRUMP coins

Democratic Senators Elizabeth Warren and Richard Blumenthal have asked the U.S. Securities and Exchange Commission (SEC) to investigate whether TRUMP emoji coins were suspected of fraud or unjust enrichment after their value plunged 98% from its peak.

Summary

Warren and Blumenthal urge the SEC to investigate possible fraud involving TRUMP tokens. According to Nansen data, nearly 989,000 wallets lost a total of $3.81 billion. TRUMP coins are trading at about US$1.47, down about 98% from the all-time high above US$73. The request adds pressure to the unresolved ethics negotiations on the CLARITY Act.

Senators ask the SEC to investigate TRUMP coins

Warren and Blumenthal wrote to SEC Chairman Paul Atkins asking the agency to determine whether tokens linked to the president involve illegal fraudulent activity or allow insiders to obtain improper gains. Several media quoted CNN as saying that the two lawmakers wrote in the letter: "We are concerned that President Trump's emoji plan may constitute an illegal scam." According to reports, senators asked the SEC to review whether there was "soft carpet pulling" behavior in the project. The term describes a situation where an insider or developer does not suddenly abandon a project, but gradually withdraws support or extracts value. Their letter did not make it clear that fraud had occurred. The SEC needs to determine whether federal securities laws apply to the token and whether its promotion, distribution, or trading involves any violations.

TRUMP investors lose US$3.81 billion

Lawmakers cited the scale of investor losses surrounding the Solana-based token. The token was launched shortly before Trump returned to the White House in January 2025. Data from blockchain analysis company Nansen shows that as of the end of June, of the 1.48 million wallets that purchased TRUMP coins, 988,905 were at a loss, with a cumulative loss of approximately US$3.81 billion. According to financial disclosures reported by U.S. media, Trump reported profits of approximately US$636 million from the emoji, while its broader cryptocurrency-related revenue in 2025 exceeded US$1.4 billion. The numbers add to questions about whether a sitting president should benefit from digital assets while formulating a federal cryptocurrency policy. According to CoinMarketCap data, the trading price of TRUMP coins on August 4 was approximately US$1.47, the market value was approximately US$366 million, and the daily trading volume was approximately US$159 million. Its price has fallen about 98% from an all-time high of $73.43, although the token has rebounded slightly in the past 24 hours.

CLARITY Act ethical controversy remains unresolved

The request to the SEC comes as senators remain divided over an ethics clause in the CLARITY bill. The bill is broader legislation designed to set rules for the U.S. digital asset market. On August 4, the White House had yet to respond to a bipartisan counterproposal put forward by Republican Senator Tom Tillis and Democratic Senator Ruben Gallego. The compromise allows state attorneys general to sue federal officials if the Justice Department fails to enforce restrictions on crypto activities. Democrats oppose the previous version in which only the Justice Department was responsible for law enforcement. Warren believes passing the bill without strengthening safeguards could widen conflicts of interest related to Trump's crypto business. The delay has caused Polymarket to predict that the probability of the bill becoming law in 2026 has dropped to a record low of 24%. The bill still needs to pass the Senate and resolve differences with the House before it can be submitted to Trump's desk.

Senate faces broader debate on developer protection

Ethical controversy is not the only issue slowing down the CLARITY Act. The Blockchain Association sent an eight-page letter to Senate leaders on August 3 refuting the National Association of Sheriffs 'allegations that the latest draft creates broad exemptions for anti-money laundering regulations. The industry group believes section 10604 protects developers who create neutral software and do not control customer assets or transactions. It said intermediaries exercising control would still be subject to the Bank Secrecy Act, sanctions and anti-money laundering requirements. The Blockchain Association's response also refuted the idea that simply earning income makes developers financial institutions. The Senate took no action on the bill on Monday and had not announced arrangements for a public vote as lawmakers approach their August recess. Warren and Blumenthal's pleas could bring TRUMP coins and the president's cryptocurrency conflict of interest closer to the core focus of these negotiations.