Warren and Blumenthal issue "carpet pulling" warning about Trump's mini-coin SEC investigation

Democratic Senators Warren and Blumenthal launch a new investigation into Trump's finances

Democratic Senators Elizabeth Warren and Richard Blumenthal have launched a new investigation into the financial situation of U.S. President Donald Trump, his family and senior government officials. This time, the two senators sent a letter to Paul Atkins, chairman of the US Securities and Exchange Commission appointed by Trump, asking the agency to investigate whether $TRUMP miniin is an "illegal scam."

Warren and Blumenthal launch latest offensive against Trump

Over the past two years, Warren and Blumenthal have been tracking the sources of revenue flowing from the digital asset industry to the president, his family and senior officials. During this period, they sent letters, requested hearings and requested documents on relevant business transactions that left them deeply suspicious. In April, Senator Adam Schiff joined the two men in pushing to make public the details of Trump's memin dinner at Mar-a-Lago-the main selling point of the dinner was dinner with the president. By June, three more senators joined Warren and Blumenthal in demanding due diligence on a US$500 million transaction between the Trump family's DeFi project, World Free Finance, and an associated partner in a United Arab Emirates country.

Who is accusing Trump of a "carpet pulling" scam?

The core accusation in Warren and Blumenthal's letter to Securities and Exchange Commission Chairman Atkins was whether President Trump may have been involved in a "carpet pulling" scam. In the cryptocurrency circle,"carpet pulling" refers to a pre-planned liquidity extraction behavior. After coordinated publicity and hype, buyers end up holding worthless tokens. Argentine President Javier Millay has been dealing with similar "carpet pulling" charges since 2025, when the LIBRA token collapsed shortly after it posted a support post on Platform X. The letter expressed concerns that "President Trump's miecoin program could constitute an illegal scam" and asked the agency to "detect any illegal fraud or improper profits that the token may contribute to."

The $TRUMP token was launched a few days before the 2025 inauguration ceremony and briefly hit a market value of approximately US$9 billion on January 19, 2025. As of the release of this report, market data shows that the market value of the token has dropped to less than US$400 million. It is estimated that as of the end of June, nearly 1 million people had lost approximately $3.8 billion due to the president's project. Similar to insiders in the "carpet pulling" scam, no matter how much damage his encryption project causes, the president himself still makes a lot of money. Warren and others have called for an investigation of the president because his family has generated approximately $1.4 billion in revenue from the digital currency business in just one year.

Is $TRUMP memin a "carpet pulling" scam?

Blockchain intelligence company TRM Labs rejected the idea of "carpet-pulling" in 2025 and further emphasized this year that the project "does not have the characteristics of a carpet-pulling scam." Ali Redbold, a former federal prosecutor and Treasury official who is now TRM's global policy director, admitted the results were offensive. "A small group of early buyers and token creators made a profit, while most of the later buyers lost money, and on a large scale." Redbold said. In his view, the issue of whether the project was a "carpet pulling" could never be resolved in favor of the president, as approximately 1 million retail buyers suffered losses while the minority holders, who control 80% of the supply, took most of the proceeds.

Warren and Blumenthal tried to bridge the gap, describing the incident as a possible "soft carpet"-a gradual withdrawal of price support rather than a one-time sudden sell-off. "Even if potential violators include those with strong political connections, the Securities and Exchange Commission must be willing to enforce the law." Two senators wrote.

Does the Securities and Exchange Commission have room for action?

The request ran into jurisdictional barriers set up by the Trump administration. A few days before Trump took office in 2025, the U.S. Securities and Exchange Commission accused a New York blockchain engineer of committing "carpet pulling fraud." A few weeks later, in late February 2025, the agency issued guidance stating that memin was not a securities, which greatly limited its regulatory authority over such tokens. The White House referred issues to the Trump Organization, while the Securities and Exchange Commission declined to comment. The letter adds to the pressure that has stalled crypto legislation, with multiple Democrats refusing to support a federal regulatory bill unless it resolves conflicts of interest related to the president's shareholding.