Recent searches
Search options
Newsletter: Trump horrifies even some of his crypto-steeped fans by launching a memecoin before his inauguration, and a flurry of activity from the new administration signals what’s in store for the crypto world in the next four years.
First, a note about my work. I am entirely funded by readers like you, and your support will be crucial going into what is clearly going to be a very busy four years.
Trump’s memecoin did not exactly receive a warm welcome from much of the crypto world, who were horrified that their crypto president would tarnish the industry’s sterling reputation by doing a blatant cashgrab.
![As some of Trump’s most devoted supporters from the crypto world were clinking champagne flutes at the industry-funded black-tie “Crypto Ball”, Trump was elsewhere, launching his own $TRUMP memecoin.b There had been no signal that this was coming, and it took the crypto world by surprise. Some, myself included, wondered if Trump’s Twitter was the latest casualty of a years-long slew of incidents in which high-profile Twitter accounts are compromised and used to shill fake crypto projects [W3IGG].
We had reason to be suspicious: the token was launched without any of the usual teasers and other crowdwork typical of Trump’s other crypto ventures. The wallet used to create the token was funded with deposits from Binance and Gate.io, two crypto exchanges that are not supposed to be available to US traders (and a particularly odd choice for a president demanding that crypto be “made in the USA”). His wealthy backers at exchanges like Coinbase and Kraken appeared to be as surprised as everyone else, and it took them several days to list the token — losing them substantial trading volume compared to if they had been in on the plan from the getgo.](https://media.hachyderm.io/media_attachments/files/113/884/441/032/091/835/original/f2793aaa8f712f3b.png "As some of Trump’s most devoted supporters from the crypto world were clinking champagne flutes at the industry-funded black-tie “Crypto Ball”, Trump was elsewhere, launching his own $TRUMP memecoin.b There had been no signal that this was coming, and it took the crypto world by surprise. Some, myself included, wondered if Trump’s Twitter was the latest casualty of a years-long slew of incidents in which high-profile Twitter accounts are compromised and used to shill fake crypto projects [W3IGG].
We had reason to be suspicious: the token was launched without any of the usual teasers and other crowdwork typical of Trump’s other crypto ventures. The wallet used to create the token was funded with deposits from Binance and Gate.io, two crypto exchanges that are not supposed to be available to US traders (and a particularly odd choice for a president demanding that crypto be “made in the USA”). His wealthy backers at exchanges like Coinbase and Kraken appeared to be as surprised as everyone else, and it took them several days to list the token — losing them substantial trading volume compared to if they had been in on the plan from the getgo.")
![Nevertheless, $TRUMP turned out to be the genuine article [W3IGG], and so was the $MELANIA token that followed shortly after. Whoever launched the $MELANIA token perhaps thought they could replicate the successful $TRUMP cash-grab by simply doing the same thing all over again, not realizing that launching a second closely-linked token would directly compete with the first. Indeed, $TRUMP prices tanked 58% upon the $MELANIA launch [W3IGG]. The prices of both tokens have dwindled since, as memecoin prices often do. However, it seems to have succeeded in convincing even more people to get into crypto: an app called “Moonshot” briefly rose to the top of the app store rankings for free finance apps as Trump partnered with the platform to allow people to purchase his $TRUMP tokens using a debit card, Apple Pay, or Venmo.1 Moonshot’s Twitter account is full of celebratory tweets and retweets about onboarding more non-crypto users, with one tweet reading “Boomers have onboarded”,2 and a retweet of a person writing “my entire family including my 80 year old grandma is on” the app.3
While the crypto world has been loudly all in for Trump, his memecoin stunt was a bridge too far for some. Crypto venture capitalist and enthusiastic Trump supporter Nic Carter, who was attending the ball when the token was launched, told Politico, “It’s absolutely preposterous that he would do this ... They’re plumbing new depths of idiocy with the memecoin launch.”4](https://media.hachyderm.io/media_attachments/files/113/884/441/039/204/787/original/edbc953bade627e5.png "Nevertheless, $TRUMP turned out to be the genuine article [W3IGG], and so was the $MELANIA token that followed shortly after. Whoever launched the $MELANIA token perhaps thought they could replicate the successful $TRUMP cash-grab by simply doing the same thing all over again, not realizing that launching a second closely-linked token would directly compete with the first. Indeed, $TRUMP prices tanked 58% upon the $MELANIA launch [W3IGG]. The prices of both tokens have dwindled since, as memecoin prices often do. However, it seems to have succeeded in convincing even more people to get into crypto: an app called “Moonshot” briefly rose to the top of the app store rankings for free finance apps as Trump partnered with the platform to allow people to purchase his $TRUMP tokens using a debit card, Apple Pay, or Venmo.1 Moonshot’s Twitter account is full of celebratory tweets and retweets about onboarding more non-crypto users, with one tweet reading “Boomers have onboarded”,2 and a retweet of a person writing “my entire family including my 80 year old grandma is on” the app.3
While the crypto world has been loudly all in for Trump, his memecoin stunt was a bridge too far for some. Crypto venture capitalist and enthusiastic Trump supporter Nic Carter, who was attending the ball when the token was launched, told Politico, “It’s absolutely preposterous that he would do this ... They’re plumbing new depths of idiocy with the memecoin launch.”4")
In my view, the memecoin launch only adds to Trump’s long list of already very serious conflicts of interest and unethical activities.
The industry’s high hopes for a crypto-focused day one in office quickly sank. However, Trump eventually got around to them later on, issuing a pardon for Silk Road creator Ross Ulbricht on day two.
The much-awaited crypto executive order came later on. Instead of establishing a “bitcoin strategic reserve”, Trump created a committee to think about whether to recommend he establish a stockpile from digital assets already held by the government.
![Altogether this seems like... nothing much. The regulatory changes alluded to here were already likely to happen with or without an executive order, this order now dictates that they happen by recommendation of (gigantic) committee. The committee itself also cannot directly make changes, but rather recommendation changes to be submitted for approval.
The Biden executive order also didn’t really do anything, and so rescinding it doesn’t really rescind anything. This is mostly symbolic, as the Biden EO strongly emphasized the need for consumer protections and the risks posed by digital assets. As for the Treasury Framework, that mostly pertained to collaborating with other countries on digital assets (including on law enforcement activities to handle illicit transactions using crypto), so I’ll be curious to see what is downstream of that.
The CBDC prohibition is, again, entirely symbolic. As I mentioned last issue [I74], many Republican crypto enthusiasts enjoy railing against the specter of a CBDC, despite the fact that there has been no effort to actually create one in the United States. However, this may anger some in the Ripple camp, as the company has been developing a platform for CBDCs. Ripple was the second largest donor to the Fairshake crypto super PAC.](https://media.hachyderm.io/media_attachments/files/113/884/455/543/358/809/original/76ee6304f40ea2bc.png "Altogether this seems like... nothing much. The regulatory changes alluded to here were already likely to happen with or without an executive order, this order now dictates that they happen by recommendation of (gigantic) committee. The committee itself also cannot directly make changes, but rather recommendation changes to be submitted for approval.
The Biden executive order also didn’t really do anything, and so rescinding it doesn’t really rescind anything. This is mostly symbolic, as the Biden EO strongly emphasized the need for consumer protections and the risks posed by digital assets. As for the Treasury Framework, that mostly pertained to collaborating with other countries on digital assets (including on law enforcement activities to handle illicit transactions using crypto), so I’ll be curious to see what is downstream of that.
The CBDC prohibition is, again, entirely symbolic. As I mentioned last issue [I74], many Republican crypto enthusiasts enjoy railing against the specter of a CBDC, despite the fact that there has been no effort to actually create one in the United States. However, this may anger some in the Ripple camp, as the company has been developing a platform for CBDCs. Ripple was the second largest donor to the Fairshake crypto super PAC.")
![Finally, there’s the “national digital asset stockpile”, which seems to be the most disappointing to the crypto world. Last issue [I74], I mentioned the horrified reaction by bitcoin maximalists to the rumors that Trump was considering cryptocurrencies other than bitcoin for his stockpile. This shift from the “strategic national bitcoin stockpile” wording Trump used at the Bitcoin Conference in July 2024, to “digital asset stockpile”, seems to cement this concern for a lot of bitcoiners, who lamented the likelihood of a “national shitcoin stockpile”. Furthermore, there was disappointment that Trump was not establishing a “strategic reserve” of the kinds promoted by Robert F. Kennedy Jr. during his presidential campaign, or by Senator Cynthia Lummis in her “BITCOIN Act” proposal. Both of those suggest that the US government should go out and buy a substantial quantity of bitcoin (4 million and 1 million BTC, respectively), which would pump the bags of bitcoiners (including Kennedy and Lummis themselves).
However, Trump’s executive order echoes his suggestion at the Bitcoin Conference that the US government should establish a stockpile by holding on to cryptocurrencies seized by law enforcement, rather than selling them after the assets are formally forfeited. As I wrote in Issue 70:
[Trump] fails to acknowledge that much of the time when the government seizes crypto assets and then sells them later on, the proceeds are returned to the victims of the crime.](https://media.hachyderm.io/media_attachments/files/113/884/461/657/194/027/original/3f0b5d001d416729.png "Finally, there’s the “national digital asset stockpile”, which seems to be the most disappointing to the crypto world. Last issue [I74], I mentioned the horrified reaction by bitcoin maximalists to the rumors that Trump was considering cryptocurrencies other than bitcoin for his stockpile. This shift from the “strategic national bitcoin stockpile” wording Trump used at the Bitcoin Conference in July 2024, to “digital asset stockpile”, seems to cement this concern for a lot of bitcoiners, who lamented the likelihood of a “national shitcoin stockpile”. Furthermore, there was disappointment that Trump was not establishing a “strategic reserve” of the kinds promoted by Robert F. Kennedy Jr. during his presidential campaign, or by Senator Cynthia Lummis in her “BITCOIN Act” proposal. Both of those suggest that the US government should go out and buy a substantial quantity of bitcoin (4 million and 1 million BTC, respectively), which would pump the bags of bitcoiners (including Kennedy and Lummis themselves).
However, Trump’s executive order echoes his suggestion at the Bitcoin Conference that the US government should establish a stockpile by holding on to cryptocurrencies seized by law enforcement, rather than selling them after the assets are formally forfeited. As I wrote in Issue 70:
[Trump] fails to acknowledge that much of the time when the government seizes crypto assets and then sells them later on, the proceeds are returned to the victims of the crime.")
Other agencies, such as the SEC, have already sprung into action to push Trump’s deregulatory agenda, however. And Elon is trying to pump Dogecoin again, this time with the backing of the government.
![Over at the SEC, Gensler has stepped down and is being replaced in the interim by the crypto-friendly Mark Uyeda, who has served as a Commissioner at the SEC since 2022. Uyeda will likely be replaced by Trump’s nominee Paul Atkins. Uyeda quickly announced that he would be forming a “crypto task force dedicated to developing a comprehensive and clear regulatory framework for crypto assets”, which will be headed by fellow crypto-friendly Commissioner Hester Peirce. In a press release, the agency signaled its new direction by criticizing its own past actions: “To date, the SEC has relied primarily on enforcement actions to regulate crypto retroactively and reactively, often adopting novel and untested legal interpretations along the way. Clarity regarding who must register, and practical solutions for those seeking to register, have been elusive. The result has been confusion about what is legal, which creates an environment hostile to innovation and conducive to fraud.”19
The SEC was also quick to rescind SAB 121, the controversial rule that Congress nearly overturned last year before Biden issued a veto based on concerns about “jeopardiz[ing] the well-being of consumers and investors” [I58, 59, 74]. “Bye, bye SAB 121! It’s not been fun,” wrote Peirce on Twitter.20 This rescission will make it easier for banks to get into the crypto custody business.](https://media.hachyderm.io/media_attachments/files/113/884/466/659/659/029/original/a120a92c995350e8.png "Over at the SEC, Gensler has stepped down and is being replaced in the interim by the crypto-friendly Mark Uyeda, who has served as a Commissioner at the SEC since 2022. Uyeda will likely be replaced by Trump’s nominee Paul Atkins. Uyeda quickly announced that he would be forming a “crypto task force dedicated to developing a comprehensive and clear regulatory framework for crypto assets”, which will be headed by fellow crypto-friendly Commissioner Hester Peirce. In a press release, the agency signaled its new direction by criticizing its own past actions: “To date, the SEC has relied primarily on enforcement actions to regulate crypto retroactively and reactively, often adopting novel and untested legal interpretations along the way. Clarity regarding who must register, and practical solutions for those seeking to register, have been elusive. The result has been confusion about what is legal, which creates an environment hostile to innovation and conducive to fraud.”19
The SEC was also quick to rescind SAB 121, the controversial rule that Congress nearly overturned last year before Biden issued a veto based on concerns about “jeopardiz[ing] the well-being of consumers and investors” [I58, 59, 74]. “Bye, bye SAB 121! It’s not been fun,” wrote Peirce on Twitter.20 This rescission will make it easier for banks to get into the crypto custody business.")
Crypto crime was particularly violent this week, with a very alarming kidnapping of Ledger co-founder David Balland and his wife (who have since been rescued by police).
![In the courts
At least eight people have been arrested in connection to the kidnapping of the co-founder of Ledger, a popular cryptocurrency hardware wallet. David Balland and his wife were kidnapped from their home in France early on January 21 by a group who demanded a large cryptocurrency ransom. The group cut off one of Balland’s fingers, sending it to his associates and demanding ransom from them and family members. However, police were able to locate Balland and his wife on the night of January 22.26 “That’s 7 crypto wrench attacks in the first 3 weeks of this year. Unprecedented acceleration,” wrote Jameson Lopp, using slang to refer to physical attacks on people known to hold large sums of crypto.27 Lopp maintains an ongoing list of people who have been attacked in attempted or successful cryptocurrency thefts.
The crypto entrepreneur who called himself “The Godfather” and an LA Sheriff’s deputy have both pleaded guilty to charges including criminal conspiracy against rights and tax charges [I68]. “The Godfather”, actually Adam Iza, hired members of the Sheriff’s department to serve as “his personal enforcers against his enemies”, using them to extort, intimidate, and set people up for arrest. The deputy who pleaded guilty, Eric Saavedra, also abused his access to LASD databases to obtain personal information on Iza’s enemies, and abused his authority to obtain search warrants against those people.](https://media.hachyderm.io/media_attachments/files/113/884/471/800/471/545/original/b341442e83db7a77.png "In the courts
At least eight people have been arrested in connection to the kidnapping of the co-founder of Ledger, a popular cryptocurrency hardware wallet. David Balland and his wife were kidnapped from their home in France early on January 21 by a group who demanded a large cryptocurrency ransom. The group cut off one of Balland’s fingers, sending it to his associates and demanding ransom from them and family members. However, police were able to locate Balland and his wife on the night of January 22.26 “That’s 7 crypto wrench attacks in the first 3 weeks of this year. Unprecedented acceleration,” wrote Jameson Lopp, using slang to refer to physical attacks on people known to hold large sums of crypto.27 Lopp maintains an ongoing list of people who have been attacked in attempted or successful cryptocurrency thefts.
The crypto entrepreneur who called himself “The Godfather” and an LA Sheriff’s deputy have both pleaded guilty to charges including criminal conspiracy against rights and tax charges [I68]. “The Godfather”, actually Adam Iza, hired members of the Sheriff’s department to serve as “his personal enforcers against his enemies”, using them to extort, intimidate, and set people up for arrest. The deputy who pleaded guilty, Eric Saavedra, also abused his access to LASD databases to obtain personal information on Iza’s enemies, and abused his authority to obtain search warrants against those people.")
The Ethereum Foundation is facing a confidence crisis, and some were disappointed when Vitalik Buterin announced that his plans to overhaul the leadership don’t include “execut[ing] some kind of ideological / vibez pivot from feminized wef soyboy mentality to bronze age mindset”.
All that and more in this issue of Citation Needed. If you found this helpful, please consider signing up for a free or pay-what-you-want subscription. Citation Needed is an independent publication, entirely supported by readers like you.
Audio version of the newsletter is now out! Thanks for your patience on this one, I had another commitment today and wasn’t able to finish editing it this morning. It’s on the original post, or wherever you get your podcasts: https://pod.link/1719025552
@molly0xfff I wondered why it wasn’t already in Overcast for my commute home 
@molly0xfff Give yourself grace. You're doing great work!
@molly0xfff Corrupt LA Sherrifs? Makings of “Training Day 2: .eth“
So everybody was freaking out about the prospect of the US government buying into crypto bigtime and possibly tanking the economy with the next crypto crash.
This doesn't look as bad though right? Just hanging on to confiscated assets does not put us at risk?
@Phosphenes a bitcoin stockpile/strategic reserve is only one way that they would introduce widespread economic risk, and IMO the deregulatory moves hold much more systemic risk
@molly0xfff What does Ross Ulbricht’s pardon mean to the crypto industry? I mean it seems to me that crypto is already somewhat concerned about looking like a grift and scam, one would think they’d stay as far away from someone like Ulbricht as they can. “It’s okay if you use crypto to buy drugs and identities on the dark web” seems like a weird flex.
@jgeorge there’s a fair bit of overlap between the libertarian and crypto industry view on Ulbricht. Generally they seem him as someone who was simply providing a free market, and feel it was unfair that he was prosecuted on drug crimes when he was operating the marketplace and not directly supplying the drugs
@molly0xfff Interesting, thank you, that’s a take that I really wasn’t understanding. Granted, I think it’s a /stupid/ take, personally, but it is at least a take.
@molly0xfff unethical, but according to the supporting cast at the Supreme Court, fully immunized!
@molly0xfff "wtf he's doing what WE'RE doing that's so unfair!"
@molly0xfff fake horrification. They know/knew EXACTLY what the felon is capable of.
@molly0xfff I've just signed up for an annual subscription. Thank you for the work you do!
@cxiao thank you for the support!
@molly0xfff@hachyderm.io
"We wanted you to make more people aware of crypto so we could fleece them, but you reinforcing how scammy many crypto offerings are makes that fleecing so much harder to do."
@molly0xfff When did shitcoins get renamed to memecoins?
@dalias @molly0xfff not all shitcoins are memecoins (for instance: bitcoin), but all memecoins are shitcoins
@dlatchx @molly0xfff While yes all magic toy money is shit, Bitcoin did not fall in the traditional definition of shitcoin, which was a coin created with the intent of short term pump & dump scamming if not outright rug pull.
@molly0xfff
There's something interesting I noticed about the criticisms on social media. I saw a post (I think on Reddit) saying something like "give us JD Vance" which struck me as really odd.
Not only does Vance have the charisma of a pair of wet socks, but he's heavily in the crypto space. Why would anyone see Trump pulling some crypto scam and think Vance would course correct on that issue? Then I started noticing other screencaps of cryptbros who were similarly promoting Vance while criticizing Trump.
The whole thing makes me really suspicious that we might be seeing the very beginnings of an astroturf campaign to set up Trump as the patsy for all the really unpopular shit that we know is coming down the pipe. Once he gets too radioactive for even the most die-hard supporters, they can dump him and put Thiel's puppet in charge. Priming people to see Vance as a favorable alternative is a good way to give that move some real positive impact with their base.
A big part of me wants to write off those suspicions as conspiratorial thinking... but on the other hand, I have a very hard time believing that tech bros pumped billions into the election just to install their guy as *Vice* President, you know?
