The Austrian School Economic Origins Of Cryptocurrencies – OpEd

February 11, 202
FEE
By Deborah Palma

The launch of Bitcoin in 2009 represents one of the most disruptive phenomena in financial history, establishing a unique link between computer science and an economic tradition opposed to the mainstream. To understand Bitcoin’s importance, it is not sufficient to analyze its cryptographic architecture alone; it is essential to delve into the intellectual roots that shaped its existence, primarily found in the Austrian School of Economics.

The conceptual origins of Bitcoin date back to 1871, with the publication of Principles of Economics by Carl Menger. Menger is known for resolving the paradox of value (also known as the diamond–water paradox), demonstrating that value is neither intrinsic to goods nor derived from the labor required to produce them, but rather a subjective attribution based on marginal utility. This analytical framework is the foundation of Austrian monetary theory: money is not a creation of the state, but the product of the gradual development of the market.

Menger demonstrated that money emerges through a spontaneous process when individuals in a barter economy encounter the difficulty of achieving a double coincidence of wants. To facilitate exchange, market participants begin to adopt goods with higher liquidity. Throughout history, tradable goods such as salt, cattle, and precious metals were evaluated, until gold and silver prevailed as the most functional media of exchange due to their physical attributes of durability, divisibility, and scarcity. Bitcoin is the digital representation of this economic evolution, emerging not by government decree, but as a voluntary choice by individuals seeking an asset with superior monetary properties.

Menger’s conceptual framework is further developed through the study of marginal utility as applied to money. The value attributed to an additional unit of currency declines as an individual’s cash balance increases, which affects the demand for money holdings and, consequently, the purchasing power of money in the market. Bitcoin, characterized by an inelastic and programmatically fixed supply, enables individuals to plan over the long term, counteracting the loss of value caused by inflation, as occurs with government-issued fiat currencies.

In 1976, Friedrich Hayek published The Denationalization of Money, in which he argued that the state monopoly over money issuance should be abolished in favor of free competition among private issuers. Hayek believed that the market would naturally select the most stable and reliable currencies, punishing inflationary issuers.

Bitcoin represents a technological advancement that governments cannot prevent, and that offers a global financial infrastructure alongside the traditional financial system. Unlike Hayek’s original proposal, which involved private banks issuing competing currencies, Bitcoin removes even the private issuer, consisting instead of an open-source protocol with decentralized governance. This architecture prevents Bitcoin from suffering the same abuses of power that Hayek observed in central banks throughout the 20th century.

The technical implementation of Bitcoin is a product of the cypherpunk movement of the 1980s and 1990s. This group advocated strong cryptography as a means of protecting individual privacy and resisting state surveillance. Projects such as David Chaum’s e-cash and Wei Dai’s b-money attempted to create digital money but faced challenges such as centralization or the double-spending problem—that is, the use of the same bitcoins in multiple transactions.

The decisive catalyst for Bitcoin’s launch was the 2008 financial crisis. Austrian Business Cycle Theory (ABCT) explains that economic crises are caused by artificial credit expansion and low interest rates, which lead to malinvestments and asset bubbles. When these bubbles burst, governments typically resort to quantitative easing (the creation of new money) and bank bailouts, harming savers while benefiting insolvent institutions.

Bitcoin’s volatility is repeatedly misinterpreted as a flaw, when in fact it is the necessary price-discovery mechanism of an asset evolving from a technological hobby into a global store of value.

Unlike stocks, Bitcoin does not generate cash flows or dividends to anchor its fundamental value. Its price is derived purely from its marginal utility as a medium of exchange and a scarce store of value. Because its supply is fixed and absolutely limited, all adjustments to changes in demand must occur through price.

The maxim “Not your keys, not your coins” is the cornerstone of individual sovereignty within the Bitcoin ecosystem. Leaving bitcoins on a centralized exchange under third-party custody undermines the original purpose of the technology: the elimination of counterparty risk.

Financial software

Jesús Huerta de Soto, in his analysis of the banking system, identifies fractional reserve banking as inherently fraudulent and the primary cause of economic instability. When an exchange retains only a fraction of its clients’ deposits and lends out the remainder, or uses them for proprietary investments, it creates artificial credit expansion.

The collapse of FTX in 2022 is the definitive example. The exchange used customer funds to finance the operations of Alameda Research, creating a multibillion-dollar deficit. Centralized exchanges behave like the deposit banks that failed in the past, operating without the transparency that the Bitcoin protocol itself provides.

The possession of private keys allows individuals to exercise full control over their wealth, without the permission of governments or financial institutions. This aligns with Murray Rothbard’s view of self-ownership and absolute private property rights as the foundation of liberty. In Bitcoin, security is guaranteed by mathematics and cryptography, not by trust in individuals or regulators.

Bitcoin represents the culmination of humanity’s pursuit of sound money, free from the distortions caused by central planners. Its significance lies in the restoration of individual sovereignty and in promoting an economy based on savings and real capital, as opposed to the uncontrolled consumption and debt encouraged by the fiat monetary system.

Bitcoin offers a response to the dilemma of inflation and economic cycles. Volatility is the price of a truly free market in the process of maturation, and self-custody is the only way to ensure that the benefits of this institutional disruption remain in the hands of individuals. As Satoshi Nakamoto signaled in the genesis block, Bitcoin is the necessary alternative to a banking system perpetually dependent on bailouts, serving as the foundation of a new monetary paradigm based on transparency and individual responsibility.

In light of the above, the transition to a “Bitcoin Standard” is not merely a technological transformation, but a shift in the economic model that favors long-term orientation, productive investment, and civilizational liberty. A commitment to private custody and a clear understanding of Bitcoin’s principles are essential for anyone seeking to participate in the Bitcoin ecosystem in a secure and consistent manner.

About the author: Deborah Palma is a Brazilian writer who holds a bachelor’s degree in Business Administration from UNINASSAU. She has published articles with Instituto Millenium, Boletim da Liberdade, and IFL Brazil, and writes for the Damas de Ferro Institute.

Source: This article was published by FEE

The Foundation for Economic Education's (FEE) mission is to inspire, educate, and connect future leaders with the economic, ethical, and legal principles of a free society. These principles include: individual liberty, free-market economics, entrepreneurship, private property, high moral character, and limited government. FEE is a tax-exempt, 501(c)3 educational foundation

Why does Ottawa want to regulate Canadian stablecoins?

By Joshua Santos
January 05, 2026 

Adam Garetson, leader of Blockchain & Digital Assets Group at Gowling WLG, joins BNN Bloomberg to provide a lookahead to crypto in Canada heading into 2026.

Stablecoins have become increasingly popular over the years, drawing the attention of the federal government to regulate them in Canada.

Cryptocurrency groups called on the government to simplify the rules to make it easier to launch Canadian dollar-linked stablecoins in the New Year.

Proposed stablecoin rules, expected in the Spring 2026 session, will introduce asset management requirements intended to bolster domestic financial sovereignty and counter foreign digital currency influence.
What is a stablecoin?

Stablecoins are a type of cryptocurrency token built on a blockchain network, designed to maintain a steady value redeemable for a pegged flat currency, such as a Canadian or American dollar, on a 1:1 basis. The backing of a dollar ensures their stable value.

The Circle website arranged on a smartphone in New York, US, on Wednesday, Feb. 12, 2025. Circle Internet Financial Ltd.'s USDC stablecoin has gained back all of the market value it lost after the collapse in crypto prices following the failure of FTX. Photographer: Gabby Jones/Bloomberg (Gabby Jones/Bloomberg)

Ottawa said it aims to foster a domestic, Canadian dollar-backed stablecoin ecosystem to counter the import of foreign currencies.


“It really is designed to be the equivalent of holding cash at the end of the day, just digitally, on a blockchain, on the computer,” Adam Garetson, partner of blockchain and fintech at Gowling WLG told BNN Bloomberg.

Unlike volatile assets like Bitcoin, stablecoins are centralized, issued and managed by companies or issuers like Tether and Circle and designed for everyday transactions.
Why do stablecoins matter?

Stablecoins bridge the gap between traditional and digital finance. They act as primary on-ramps and off-ramps for the crypto ecosystem, according to a report from Mastercard.

International transfers can be settled within minutes at minimal costs, 24/7, offering an efficient alternative to slow, expensive traditional wire transfers, according to TD Economics.Latest updates on crypto news here

Mastercard said efficiency and accessibility promote financial inclusion for the world’s unbanked populations, requiring only an internet connection and a digital wallet to access global financial services.
Why is regulation being called for?

The Bank of Canada and cryptocurrency industry groups say the main concern for Ottawa is the potential impact on Canadian monetary sovereignty and financial stability, particularly as financial markets see an increase of U.S. backed digital currencies.


“Large firms like Shopify moved quickly to accept USDC,” Vass Bednar, managing director of the Canadian SHIELD Institute for Public Policy told BNN Bloomberg in an interview. “When our most valuable company is transacting through stablecoin, the policy environment here needs to recognize that innovation.”

The cryptocurrency groups warn if U.S. backed stablecoins become common in Canadian transactions, Canada could lose influence over it’s own currency and monetary policy.

A significant driver for the push of Canadian backed stablecoins is international development and corporate action, Bednar said. The U.S. introduced the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, a law designed to enforce the use and support of the U.S. dollar as a stablecoin.

“I think the biggest prompt to our expedited policy response was the general threat to monetary sovereignty through the GENIUS Act,” said Bednar.
Proposed rules for stablecoins issuers

Budget 2025 will bring legislation to establish rules for stablecoin issuers with Bill C-15. The rules will require genuine support of the digital assets and deal with issues of risk management, information privacy and national security.

“The Stablecoin Act governs issuers,” said Gareston. “It governs the issuance, creation and redemption of stable coins. So effectively an investor could go to an issuer, an actual creator of the stablecoin, and give them cash for stable coins.”

Circle said in January it filed a draft registration statement to go public with the US Securities and Exchange Commission. Photographer: Jakub Porzycki/NurPhoto/Getty Images (Jakub Porzycki/NurPhoto/Photographer:Jakub Porzycki/NurP)

An investor could then use the currency on digital financial markets such as Kraken or Coinbase and trade on the market. Issuers of the coin, however, cannot generate interest on supported dollars.

Garetson helps public and private businesses navigate a complex legal and commercial environment around finance and tech sectors. He does not have a timeline for when the act will be enforced but advises businesses to begin preparing now by aligning with governance, compliance and operational systems.

Bednar meanwhile expects it will pass early next year as opposing parties back it.

“It is anticipated that the Conservative party is supportive of this legislation, meaning it could be passed in the Spring 2026 session,” said Bednar.

The draft law includes a strict ban on issuers paying interest or yield on stablecoins. Further, federal, provincial securities laws still apply.

“Canadians expect regulatory environments to reflect and anticipate the realities of today, and not be in constant catch-up mode,” said Bednar. “Trump’s GENIUS Act was the kick in the pants we needed.”

The Act mandates stablecoin issuers use qualified custodians to hold reserves, ensuring assets are backed, separate from the issuer’s own funds, and protected from bankruptcy. Custodians are typically regulated financial institutions that safeguard reserve assets reporting to the central bank or regulator. Bednar wonders who can qualify as a custodian.

“Legislation is silent about who can act as a qualified custodian, and where, geographically, reserve assets must be held,” said Bednar.

Joshua Santos
Journalist, BNNBloomberg.ca

CRIMINAL CRYPTO CAPITALI$M

Trump-pardoned CEO's firm accused of 'knowingly' enabling Hamas attacks

Matthew Chapman
November 24, 2025 

RAW STORY


FILE PHOTO: Binance founder Changpeng Zhao, also known as CZ, speaks at the Bitcoin Asia conference, in Hong Kong, China, August 29, 2025. REUTERS/Tyrone Siu/File Photo

A new lawsuit against a cryptocurrency company whose billionaire founder was recently pardoned of federal crimes by President Donald Trump argued that the firm "knowingly" helped finance the Oct. 7, 2021, attack on Israel by Hamas, Reuters reported on Monday.

The firm, Binance, serves as an exchange for cryptocurrency trading, and was the primary competitor to FTX before the latter firm was implicated in a fraud scheme by its CEO and declared bankruptcy in 2022.

"According to a complaint made public on Monday, the world's largest cryptocurrency exchange laundered money for Hamas even after pleading guilty in November 2023 and paying a $4.32 billion criminal penalty for violating federal anti-money-laundering and sanctions laws," reported Reuters.

The plaintiffs, who include 306 American victims and relatives of victims, "accused Binance of knowingly enabling Hamas, Hezbollah, Palestinian Islamic Jihad and Iran's Revolutionary Guard to move more than $1 billion through its platform, including more than $50 million after the October 7 attack," according to the report.

"Binance intentionally structured itself as a refuge for illicit activity," the complaint said. "To this day, there is no indication that Binance has meaningfully altered its core business model."

Binance's former CEO and founder, Changpeng Zhao, pleaded guilty to money laundering charges in 2023. Earlier this year, Trump gave him a full pardon, claiming that he was politically targeted by the Biden administration.

However, that pardon came after Binance spent months promoting a stablecoin issued by World Liberty Financial, a cryptocurrency venture owned by Trump family members that has netted them over $1 billion in profit.

THE GRIFT

G20 risk watchdog warns of ‘significant gaps’ in global crypto rules

By Reuters
Published: October 16, 2025 

A statue of U.S. President Donald Trump holding a bitcoin in recognition of his support for cryptocurrency is displayed on the National Mall with the Washington Monument behind, Wednesday, Sept. 17, 2025, in Washington. (AP Photo/Alex Brandon)

PARIS/LONDON - There are “significant gaps” in countries’ attempts to regulate fast-growing crypto markets, which could potentially harm financial stability, the G20’s risk watchdog warned on Thursday.

The Financial Stability Board (FSB), a body founded in the aftermath of the global financial crisis, made a series of recommendations on rules for crypto in 2023, to try to bring it in line with the mainstream financial sector.

In Thursday’s review, it said while some progress had been made, international implementation and coordination of rules remained too “fragmented, inconsistent, and insufficient to address the global nature of crypto-asset markets.”

Financial stability risks remain “limited at present” it assessed, but they are now rising with the surge in bitcoin and other cryptocurrencies having doubled the value of the global crypto market to US$4 trillion over the last year.

“This is consequential,” FSB secretary general John Schindler told Reuters, describing the concerns raised in the review. “These crypto assets can move across borders very easily, much more easily than other financial assets.”

Stablecoin rules lacking

This year’s surge in the value of the crypto market has come against a backdrop of U.S. President Donald Trump’s pro-crypto stance.

Schindler said there was a need for close monitoring as crypto becomes increasingly connected with the traditional financial system and stablecoins - cryptocurrencies pegged to the dollar for the most part - become more widely used.

One of the key concerns flagged by the FSB’s report was that hardly any countries have complete regulatory frameworks for stablecoins yet.

While still small in comparison to the bitcoin-dominated cryptocurrency markets, the market for stablecoins has grown by almost three-quarters over the last year to just under $290 billion, a trajectory expected to continue with U.S. rules on them now in place

The FSB’s report reviewed 29 jurisdictions’ implementation of crypto and stablecoin recommendations, including the U.S., EU, Hong Kong and the UK, although the U.S. only participated in the stablecoin aspect. El Salvador, where the world’s largest stablecoin, Tether, is based did not take part, however.

Schindler said the latest review had still been worthwhile even without El Salvador’s input given the FSB was already aware of the risks, but stressed the need for better global cooperation and coordination from all jurisdictions going forward.

“We can all put in place frameworks, but if there are people who are not cooperating and helping each other, it’s just going to be really challenging because these things just they don’t observe borders,” he said.

Risks ‘limited at present’ but growing

Global rulemakers were jolted in action by the collapse of crypto exchange FTX and demise of TerraUSD/Luna coins in 2022.

There has been major jitters over the last week too, with the largest crypto crash in history on Friday triggering almost $20 billion of liquidations in the market.


The FSB’s report laid out a list of eight recommendations for jurisdictions to speed up the implementation of comprehensive and globally consistent rules and for better cross-border cooperation and coordination.

They follow similar concerns raised by the European Union’s securities watchdog in April that even small markets can be the source of bigger problems in the financial system.

Even if countries have their own regulatory regimes, they can still be impacted by the activities of crypto companies who are headquartered offshore, Schindler said.

Reporting by Elizabeth Howcroft in Paris and Marc Jones in London; Editing by Louise Heavens

CRIMINAL CAPITALI$M;GRIFTER IN CHIEF

Most of Trump's Net Worth Comes From 'Crypto Empire': Report

According to an investigation by Accountable.US, 73% of Trump's net worth may now come from crypto, which his administration is working to dramatically deregulate.


A Donald Trump coin is pictured alongside Bitcoin and various other cryptocurrencies in this photo illustration in Brussels, Belgium, on August 5, 2025.
(Photo: Jonathan Raa/NurPhoto via Getty Images)

Stephen Prager
Aug 11, 2025
COMMON DREAMS

Over his nearly seven months as president, the administration of U.S. President Donald Trump has been taking a sledgehammer to regulations on cryptocurrency. A new report sheds further light on the reasons why.

The president may be profiting far more from his "rapidly-growing crypto empire" than was previously known and has used it to dramatically increase his net worth, according to an investigation released Thursday by the anti-corruption group Accountable.US

While a report from Bloomberg on July 2 estimated the billionaire president's crypto holdings to total about $620 million of his nearly $7 billion net worth, Accountable examined other investments that had not previously been reported.

"President Trump's net worth," the group estimated, "could roughly be $15.9 billion, with about $11.6 billion in uncounted crypto assets." This would mean crypto accounts for 73% of his net worth.

Accountable reached this number by including investments that either had not yet occurred or were not public at the time of previous reporting.

These included roughly 22.5 billion tokens issued by Trump-owned WorldLiberty Financial Inc., which are estimated to be worth about $2 billion in value, but had not yet become tradable.

Other analyses, it said, also excluded the $7 billion in value of the new $TRUMP memecoins released in late July 2025.

"Two Trump-affiliated companies owned 80% of the $TRUMP venture as of May 2025 and were estimated to have collected over $324 million just in fees since January 2025," the report said.

Accountable also factored the holdings of Trump Media—the company that owns the president's social media app Truth Social. In July, the company bought $2 billion in Bitcoin and reserved another $300 million for Bitcoin options, and also announced the launch of its own set of NFTs.

As part of what they called "Crypto Week," Republicans passed multiple industry-friendly pieces of crypto legislation in July, the GENIUS Act and the CLARITY Act, which Accountable says allow Trump to directly profit.

The GENIUS Act purported to create a regulatory framework for so-called "stablecoins," which are pegged to existing financial assets like the U.S. dollar and are poised to become part of the portfolios of increasing numbers of companies. However, as Nikki McCann Ramirez wrote for Rolling Stone in June:
One of Trump's priorities has been the normalization of these so-called stablecoins — a type of asset that his family is now hawking.

Despite the moniker, stablecoins can be extremely unstable. A 2023 study published by the Bank for International Settlements found that of 60 stablecoins analyzed in their review, all of them had become de-pegged from their underlying asset at least once.

The 2022 crypto crash was triggered by the failure of Terraform Lab's Terra/Luna "algorithmic" stablecoin—the collapse of which saw $45 billion erased in the span of a week.

The bill places only very light regulations on stablecoins, and Sen. Elizabeth Warren (D-Mass.) has warned that since he controls such a large percentage of the stablecoin market, their uptake into the broader economy could "create a superhighway for Donald Trump's corruption."

"As soon as the players understand that Trump's intervention is a real possibility, then the stablecoin market is no longer about a careful review of whether there are adequate dollars to back up a particular stablecoin, or whether the stablecoin issuer has an AAA rating," Warren said.

"Instead, the whole game becomes one of trying to engage the president to weigh the end and make one set of coins more valuable, and therefore another set of coins less valuable," she added. "It's corruption, but it's also a market manipulation that ultimately drains away any development...It undermines all the markets at that point."

But the CLARITY Act, which has been passed by the House and now awaits consideration in the Senate, is "the real prize" for the industry. It would dramatically narrow the Securities and Exchange Commission's (SEC) ability to regulate cryptocurrencies—most notably by recategorizing many assets as commodities instead of securities, which places them under the much smaller and less-resourced Commodity Futures Trading Commission (CFTC).

Trump would be one of the foremost beneficiaries of this bill, which would exclude digital assets like his $TRUMP and $MELANIA "meme coins" from SEC regulation.

It would also likely affect the classification of Bitcoin, which Trump Media has explicitly acknowledged would benefit the president. "If Bitcoin is determined to constitute a security," the company said in a June SEC filing, it could "adversely affect" the price of Bitcoin and the price of Trump Media's holdings.

Not only does this benefit Trump, said Accountable.US executive director Tony Carrk, but the legitimization and entrenchment of these unstable assets has the potential to make the whole economy less stable.

"Eerily reminiscent of the risky behavior that gave us the 2008 financial collapse, Donald Trump is ushering in a new era of casino-like speculation on Wall Street with highly volatile crypto trading in retirement accounts," Carrk said.

"While the Trump family stands to win either way with crypto investment product fees," Carrk added, "throwing such a wild card into the financial system with little to no guardrails could lead to history repeating itself—with everyday Americans footing the bill when things inevitably go south."

GENIUS Act gives global crypto industry ‘clarity, simplicity,’ says expert

By Jordan Fleguel

Published: July 24, 2025 


Landmark cryptocurrency legislation signed into law by U.S. President Donald Trump last week gives the fast-growing global crypto industry new legitimacy while making it easier for investors to gain exposure to the sector in a safe way, an expert says.

“It gives clarity, simplicity and lets everybody understand what the rules of the playing field are,” Andrew Forson, president of Toronto-based DeFi Technologies, told BNN Bloomberg in an interview on Wednesday.

“That encourages innovation without fear of inadvertently triggering a securities law or breaking some sort of rule that would make it really, really difficult for the business to recover from.”

The legislation, known as the GENIUS Act, is a major step toward legitimatizing the crypto industry in the eyes of the U.S. government through overarching rules and regulations. But the law’s impact will reach far beyond American crypto markets, said Forson.

“The U.S. is without a doubt the largest capital market in the world, and whenever they provide a degree of regulatory clarity, it makes it easier for everybody worldwide,” he explained.

The rise of cryptocurrency trading has led to increased demand from investors looking to gain exposure to the industry without taking on the risk and volatility it’s historically been associated with.

Crypto-linked exchange-traded funds (ETFs) have began popping up on exchanges around the world in recent months, offered by financial services companies like DeFi.

“DeFi Technologies and our wholly owned subsidiary Valour is probably one of Europe’s most significant or prominent digital asset exchange-traded product (ETP) issuers,” Forson said.

“In particular, we have 78 digital asset-underlying ETPs listed on over eight exchanges throughout the world, and one of the big benefits of this is it makes it a lot easier for institutions and retail investors to gain exposure to digital assets in their investment portfolios.”

Forson said he acknowledges that there will likely continue to be a certain amount of hesitancy towards cryptocurrency from some investors given the numerous instances of fraud in the industry over the years.

The most notable example being the high-profile collapse of popular crypto exchange FTX in 2022, which led to fraud charges being brought against founder Sam Bankman-Fried. He eventually was found guilty and is currently serving a 25-year prison sentence.

“That actually is one of the reasons why DeFi… (is) so well positioned to help institutions and individuals gain real exposure to the digital asset space, with broad exposure across many, many digital assets beyond just bitcoin, in a safe and regulated manner,” said Forson.

Shares in DeFi itself, which were changing hands at around US$3 per share in midday trading on Thursday, are cheaper than they should be, Forson argued, noting that the company is profitable and has many avenues for future growth.

“I can unequivocally say that we are undervalued. We should be trading at a higher multiple than we are… we are a profitable company, we actually make real money and (will) continue to do so into the foreseeable future,” he said.

“Just a few days ago, we hit the US$1 billion assets under management metric, which is always a nice threshold to reach, with the assets that are held by Valour, and DeFi Technologies itself is also involved in a number of other areas including a corporate venture capital portfolio.”

Jordan Fleguel
Journalist, BNNBloomberg.ca

Coinbase hires top Democrat political strategist as crypto industry flexes its newfound political might

By The Associated Press
 June 12, 2025 

David Plouffe, right, Uber senior vice president of policy and communications, talks about the Uber expansion in Phoenix as Arizona Gov. Doug Ducey listens during a news conference announcing the opening of the new Uber offices June 11, 2015, in Phoenix. (AP Photo/Ross D. Franklin, File)

NEW YORK — A senior adviser to Kamala Harris’ 2024 presidential campaign is joining Coinbase’s global advisory council, which already includes several former U.S. senators and President Donald Trump’s ex-campaign manager, as the cryptocurrency exchange broadens its political reach.

David Plouffe, a top Democratic strategist best known as an architect of Barack Obama’s successful 2008 presidential campaign, is the latest addition to the council, joining as the cryptocurrency industry plays an increasingly prominent role in shaping fast-moving legislation in Congress.

The bipartisan involvement reflects how both parties see crypto holders as an important and growing base of potential swing voters they are eager to tap, as well as their efforts to shape — and profit from — the lucrative industry. It also shows the political heft the crypto industry now carries under Trump, with several Democrats and Republicans joining the company’s payroll.

The crypto industry was among the largest spenders in the 2024 election. A crypto super political action committee spent over US$130 million in 2024 congressional races. Coinbase — the nation’s largest crypto exchange — was the super PAC’s biggest contributor.

The cryptocurrency industry’s bets are already paying dividends. Congress is now moving quickly on industry-friendly legislation that would create a comprehensive framework for the regulation of digital assets amid a shift in Washington. Trump, a Republican, has pledged to make the U.S. the global capital of cryptocurrency, contrasting with what industry leaders viewed as a stifling regulatory approach under the previous Democratic administration.

Americans may soon be able to invest in crypto in their retirement accounts, after Trump’s Labor Secretary repealed a Biden administration guidance that said crypto may not be appropriate for 401ks and IRAs. President Joe Biden’s regulators had argued that extreme volatility of cryptocurrencies makes the asset class too risky for Americans trying to save long-term for retirement.

Regardless of how crypto has performed in the past, the ability for Americans to put their retirement funds — roughly US$44 trillion in assets — into crypto will lead to billions of dollars in profits for the industry, if even a small portion of Americans put their assets into a cryptocurrency fund.

Trump and his family have also been aggressively expanding their personal business into almost every part of the cryptocurrency ecosystem, including raising billions of dollars to buy bitcoin, creating a new stablecoin and launching and promoting a Trump-themed meme coin.

Trump addressed crypto enthusiasts at Coinbase’s policy conference in New York via video on Thursday, saying it’s “a really big honor” to be called the “first crypto president.”

“Congratulations to everyone at this exciting time for your industry and in our country’s life,” Trump said, to applause.

Chris LaCivita, the former co-campaign manager of Trump’s 2024 presidential bid, joined Coinbase’s advisory council in January.

Interviewed at Thursday’s conference, LaCivita and Plouffe recounted their efforts to court so-called “crypto voters” in the 2024 election. Both the Harris and Trump teams viewed the group as a new bloc of potential swing voters who were up for grabs. Coinbase chief policy officer Faryar Shirzad said the company met with both campaign to sell them on the potential.

LaCivita said Trump — who had once been a crypto skeptic — quickly came around, with the help of input from his sons Barron Trump and Donald Trump Jr.

“The newness of it I think was exciting, from the president’s standpoint,” said LaCivita. “It didn’t take really a lot.”

The campaign, he said, also saw an opportunity to reach a swath of voters who may not have been actively engaged with politics in the past, including Black and younger voters, with whom the Republican Party struggled in the past.

“It gave us an opportunity to establish common ground with an area and a demographic that we need expand in in order to be successful,” he said. “This was one of those just great growth opportunities in politics,” which he said are “few and far between.”

Plouffe said the Harris campaign had reached the same conclusion and argued the group is only growing.

“The folks who own crypto are pretty politically competitive,” he said. “These are not MAGA voters. They are swing voters. Lean a little Democratic, certainly lean a lot younger.”

Both were also bullish on their party’s chances in next year’s midterm elections. Plouffe stressed the party out of power generally has an edge. He acknowledged that the Democratic Party “has a lot of work to do on its brand” after their disappointing finish last year, but said he hoped “that’s going to come from the people who run and from the grassroots together.”

LaCivita said the goal for Trump would be to demonstrate to voters that he is delivering on his campaign promises.

Plouffe, who previously served on the global advisory board for Binance, joins a council that also includes former Arizona Sen. Kyrsten Sinema, a Democrat-turned-independent. The role of advisers is to be a “sounding board” to discuss policy efforts and business strategy, Shirzad said.

In Congress, legislation is advancing far more quickly than usual for a new industry — a pace that some involved in shaping the bills say comes amid an all-out pressure campaign from the cryptocurrency sector.

On Wednesday, a group of Democrats joined the Republican majority to advance legislation regulating stablecoins, a type of cryptocurrency typically pegged to the U.S. dollar. Final passage through the Senate could come next week.

Meanwhile, a more sweeping bill to implement cryptocurrency market structure has begun moving through House committees.

___

Joey Cappelletti, Ken Sweet and Jill Colvin, The Associated Press

Cappelletti reported from Washington.

Shaquille O’Neal to pay US$1.8 million to settle FTX class action lawsuit

By The Associated Press
June 13, 2025 

Shaquille O'Neal speaks during a press conference on Feb. 13, 2024, in Orlando, Fla. (AP Photo/Kevin Kolczynski, File)

Former NBA player Shaquille O’Neal will pay US$1.8 million to settle a class action lawsuit related to the demise of cryptocurrency exchange FTX.

O’Neal, and other celebrities like Tom Brady and Stephen Curry, were named in the lawsuit in 2022. They had been accused of touting FTX as a reputable and trustworthy investment option via paid endorsements. The proposed settlement only pertains to O’Neal.

Three years ago FTX was the third-largest cryptocurrency exchange, but it ended up with billions of dollars worth of losses and had to seek bankruptcy protection. The Bahamas-based company and its founder, Sam Bankman-Fried, came under investigation by state and federal authorities for allegedly investing depositors funds in ventures without their approval.

Before its failure, FTX was known to use high-profile Hollywood and sports celebrities to promote its products. It had the naming rights to a Formula One racing team as well as a sports arena in Miami. Its commercials featured “Seinfeld” creator Larry David, as well as Brady, the former quarterback of the Tampa Bay Buccaneers and New England Patriots, basketball players O’Neal and Curry, and tennis star Naomi Osaka.

Bankman-Fried was sentenced to 25 years in prison in March 2024. A little more than a month after that, FTX said in a court filing that nearly all of its customers would receive the money back that they were owed.

While the proposed settlement with O’Neal had been agreed to in April, the payment amount and other terms were disclosed in a filing with the U.S. District Court, Southern District of Florida, Miami Division, earlier this week.

The settlement class includes anyone who deposited funds into FTX or bought its FTT token between May 2019 and late 2022.

The agreement, which still needs court approval, would provide O’Neal with a broad release from future claims and also includes a stipulation that he can’t seek reimbursement from the FTX estate.

The payment will be made within 30 days of the settlement being finalized, according to the filing.

Michelle Chapman, The Associated Press

Former head of crypto platform Celsius sentenced 12 years


By AFP
May 8, 2025


Founder and former CEO of crypto lender Celsius Alexander Mashinsky has been sentenced to 12 years in prison on fraud charges 

- Copyright GETTY IMAGES NORTH AMERICA/AFP/File David Dee Delgado

The founder and former CEO of bankrupt cryptocurrency trading platform Celsius, Alexander Mashinsky, was sentenced Thursday to 12 years in prison on fraud charges.

Mashinsky, 50, pleaded guilty last December to securities fraud in a deal that reduced the level of charges he faced.

The sentence comes down nearly three years after the startup’s collapse as a cryptocurrency platform, which offered customers the ability to invest in digital currencies, including its own coin, CEL.

According to the indictment, Celsius executives took more than $4 billion in customers’ assets to finance the platform’s operations, make unsecured loans and invest in high-risk items.

Mashinsky was also accused of manipulating the price of CEL by using customers’ funds to purchase the currency, artificially inflating its price.

At its peak in late 2021, Celsius had more than one million clients and held more than $25 billion in assets.

But the company hit hard times in the spring of 2022 as the value of cryptocurrencies plummeted.

Facing deep customer withdrawals, Celsius on June 12, 2022 froze over $4.7 billion in customer accounts before filing for bankruptcy protection a month later.

A progress report published in March found that 93 percent of the frozen assets had been recovered and returned to former Celsius customers.

The 2022 cryptocurrency collapse affected a number of other startups in the field, including FTX, the second-largest crypto exchange that filed for bankruptcy in November 2022.

The actual 'biggest Ponzi scheme of all time'

REUTERS/Craig Hudson
U.S. President Donald Trump and U.S. First Lady Melania Trump arrive for the National Governors Association (NGA) dinner and reception in the East Room at the White House in Washington, D.C., U.S., February 22, 2025.

Robert Reich

March 06, 2025

ALTERNET

I remain optimistic about the longer term, but I still awaken each morning with a sense of dread. I’m sure some of you do, too.

Start with Elon Musk’s bonkers comment that Social Security is “the biggest Ponzi scheme of all time.”

In a Ponzi scheme, a con artist lures investors into a fake investment project, pockets the cash, and then gets new “investors” to funnel their cash to the earlier investors — until there are no new recruits and the whole thing collapses. The last ones in are suckers left holding worthless bags.

Social Security is not a Ponzi scheme. It’s a high-functioning, universal, and exceptionally efficient part of the American social safety net — the opposite of a Ponzi scheme. Which is why the overwhelming majority of Americans oppose cutting it.

Social Security is a simple “pay as you go” program. Current workers, via the payroll tax, fund payouts for retirees and disabled people. In 2024, about 1 in 5 U.S. residents received Social Security.

I used to be a trustee of the Social Security trust fund. I know what I’m talking about.

As the Social Security Administration explains, “In 2025, when you work, about 85 cents of every Social Security tax dollar you pay goes to a trust fund. This fund pays monthly benefits to current retirees and their families and to surviving spouses and children of workers who have died. About 15 cents goes to a trust fund that pays benefits to people with disabilities and their families.”

The only reason that the Social Security trust fund is slowly running out of money is the trustees never anticipated that so much of the nation’s total income would be in the hands of so few people (such as Elon Musk).

The simple way to fix this is to lift the cap on income subject to Social Security payroll taxes, which is now $176,100.

Elon Musk, Jeff Bezos, and Mark Zuckerberg fulfilled their 2025 Social Security payroll tax obligations a few minutes past midnight on January 1. Most Americans continue paying payroll taxes all year.

If you want to see a real Ponzi scheme, look no further than the crypto investments Musk and Trump have hyped.

Trump’s new cryptocurrency, “$Trump,” soared and then crashed, just like every other Ponzi scheme. It generated enormous profits for insiders like Trump, but a cumulative $2 billion in losses for more than 800,000 other investors.

Trump claims ignorance. “I don’t know if it benefited” me, he said. “I don’t know much about it.” (The Trump family and its business partners earned nearly $100 million in trading fees alone on the coin.)

Musk has been promoting “dogecoin” since 2019. In the days following Trump’s announcement of the launch of Musk’s so-called Department of Government Efficiency (DOGE), the value of dogecoin soared over 70 percent. Since then, it’s dropped like a rock. Another classic Ponzi scheme.

With Trump now in office, crypto is back to its Ponzi ways. It’s emerging from a four-year federal crackdown on crypto fraud, market manipulation, and other scams following the collapse of Sam Bankman-Fried’s crypto exchange FTX in 2022 — one of the biggest Ponzi schemes in recent memory.


Tomorrow, Trump is even holding a “crypto summit” at which he’ll promote the idea of a federal crypto reserve that will give crypto schemes a temporary boost by increasing demand for them.

But why should American taxpayers foot the bill for a crypto reserve? The most obvious winner will be Trump, whose own crypto venture carries millions of dollars in tokens that are to be included in the reserve.

Other winners will be crypto executives, many of whom donated extensively to Trump’s reelection effort. One example: Ripple, whose XRP token is one of the five that Trump said would be included in the reserve — and which donated $45 million to an industrywide PAC that sought to help elect Trump and other Republicans.

Trump’s crypto efforts are ways to curry his favor by paying him off.


Consider Justin Sun, a Chinese cryptocurrency entrepreneur whom the Securities and Exchange Commission charged with securities fraud in March 2023.

After Trump was elected in 2024, Sun bought $30 million worth of Trump’s World Liberty Financial crypto tokens, putting $18 million directly into Trump’s pockets. Since then, Sun has invested another $45 million in WLF. Altogether, Sun’s investments have netted Trump more than $50 million.

Trump’s Securities and Exchange Commission just dropped its prosecution of Sun.

The SEC also dropped its case against the crypto trading platform Coinbase after the platform donated $75 million to a political action committee associated with Trump and $1 million to Trump’s inauguration.


To top it off, the SEC just ruled that “memecoins” aren’t securities, meaning that Trump’s novelty crypto tokens won’t be subject to any regulatory oversight. An open invitation to more Trump Ponzi schemes.

My real dread has to do with the much bigger Ponzi scheme that Trump and Musk are peddling.

They’re promising huge “savings” from destroying the federal government — including programs like Social Security and Medicaid — savings that will go to America’s wealthy and big corporations in the form of tax cuts.

At Musk’s urging, the Social Security Administration recently announced it will consolidate the current 10 regional offices it maintains into four and cut at least 7,000 jobs from an agency already at a 50-year staffing low.

The Republican budget recently pushed through the House cuts over $880 billion out of Medicaid.

Who will get left holding the bag? Most Americans.

Zoom out and you’ll see the biggest Ponzi scheme of them all — the entire Trump 2 regime.

Trump is promising to “make America great again” by raising tariffs, deporting more than 11 million people, taking a wrecking ball to the federal government, pulverizing democracy, and joining Putin and other global dictators.

Trump is the con artist behind this giant Ponzi scheme. He lured voters into this fake MAGA project, pocketed some of the cash and rewarded his billionaire backers and friends (including Musk) with more, and will leave most Americans with a corrupt and decimated society.

I’m still optimistic about our power to overcome this and our resilience in bouncing back from it. But the dread I feel when I open my eyes in the morning concerns the sheer magnitude of the largest and most cynical Ponzi scheme in history.

Robert Reich is a professor of public policy at Berkeley and former secretary of labor. His writings can be found at https://robertreich.substack.com/

SPECULATION.SCAM,THE GREAT GRIFT

Trump signs executive order establishing ‘Strategic Bitcoin Reserve’

THE REAL PONZI SCHEME

By AFP
March 6, 2025


White House crypto czar David Sacks says the US government bitcoin reserve 'will not cost taxpayers a dime'

 - Copyright AFP/File

 INA FASSBENDER

US President Donald Trump signed an executive order Thursday establishing a “Strategic Bitcoin Reserve,” forcefully endorsing a currency once shunned as a tool for money launderers.

The government stockpile, which backers liken to a “digital Fort Knox,” will be composed of digital currency seized in US criminal proceedings, said David Sacks, the White House’s crypto “czar,” emphasizing in a social media post that Thursday’s move made good on a Trump campaign promise.

The use of these assets “means it will not cost taxpayers a dime,” Sacks said in a post on X.

“The purpose of the Stockpile is responsible stewardship of the government’s digital assets under the Treasury Department.”

The policy also allows the secretaries of Commerce and Treasury to develop “budget-neutral strategies” for adding to the reserve, he said.

Bitcoin prices fell as much as five percent following the announcement, apparently out of disappointment the program involves no immediate bitcoin purchases.

The move comes on the eve of a White House summit Friday with major crypto figures, who were significant donors to Trump’s successful campaign to regain the presidency.

Cryptocurrency supporters organized heavily in the 2024 election in response to the skepticism of Joe Biden’s administration to digital currency, also helping to propel Republicans to victory in key Senate races.

For believers, cryptocurrencies represent a financial revolution that reduces dependence on centralized authorities while offering individuals freedom from traditional banking systems.

Trump has waded into the space personally, partnering with exchange platform World Liberty Financial and launching his own “Trump” memecoin in January as his wife Melania did the same — moves that have prompted conflict of interest accusations.

Trump critics such as Democratic Senator Chris Murphy of Connecticut have characterized Trump’s cryptocurrency venture as a conduit to potential corruption on a massive scale.

“It’s as if Trump is posting his Venmo or his Cash App handle and inviting corporations and foreign governments to just send him cash in secret,” said Murphy in a video posted to X in which he called Trump’s crypto venture “a pure grift.”

‘Old fashioned scam’: Rachel Maddow warns new Trump move akin to '90s ‘Beanie Baby bubble'

Erik De La Garza
March 6, 2025 
RAW STORY




(Screenshot via MSNBC)


President Donald Trump’s new executive order creating a “strategic reserve” of cryptocurrency was subjected to a brutal round of mockery by Rachel Maddow, who told MSNBC viewers Thursday that the move is reminiscent of collectors scooping up Beanie Babies in the 1990s.



“It is a deeply, deeply old fashioned simple scam at this point, which points right to the White House,” Maddow said.

Maddow on Thursday ripped into Trump’s order, which authorized the federal government to stockpile cryptocurrency assets seized by law enforcement.

“Imagine Trump had just announced that the U.S. government was going to buy up tons of Beanie Babies,” Maddow said with a laugh. “We are going to establish a federal government reserve of billions of Beanie Babies. What do you think would happen to the value of Beanie Babies – right?

She continued to knock the president’s eyebrow-raising order as she compared the cryptocurrency fad of the 2020s, to the obsession with the plush collectibles created 30 years ago.

“It’s like when there was the Beanie Baby craze in the late 90s,” Maddow said. “People started buying these stuffed animals, right? Beanie Babies kind of inherently not worth much, but people were speculating on them, right? It was a Beanie Baby trading bubble, other than maybe some emotional value if you had one as a child, Beanie Babies didn't have much inherent value.”

The host – who Trump said hours earlier should be "forced to resign" – added though that they were still “worth buying up a bunch of them because there was speculation on the premise that as collectibles, maybe one day your Beanie Babies collection could be worth a lot of money.”

“Cryptocurrencies operate on the same idea,” Maddow continued. “They have no inherent value at all, the only value they have is if you have some reason to believe that somebody else might want to buy them from you in the future, that's it.”


She concluded that the “key to actually making money” is to convince others that “your crypto is popular and in demand, convincing people that your crypto thing is going to have value in the future.”

“It's going to be collectible as Beanie Babies.”

Trump’s action comes ahead of a White House crypto summit on Friday.

Watch the clip below or at this link:

Trump to welcome crypto elite at White House


By  AFP
March 5, 2025


Crypto czar David Sacks speaks at the White House on March 3, 2025 next to President Donald Trump - Copyright AFP Kirill KUDRYAVTSEV

Thomas URBAIN

US President Donald Trump, who has multiple ties to the crypto industry, will host the sector’s top players at a White House summit on Friday, as the field enjoys renewed momentum following his election.

The US crypto community rallied behind Trump’s campaign, contributing millions of dollars towards his victory over Joe Biden, whose administration tightened regulations and expressed skepticism toward digital currencies. Now, they’re seeing their support pay dividends.

Trump has waded into the space personally as well, partnering with exchange platform World Liberty Financial and launching his own “Trump” memecoin in January as his wife Melania did the same — moves that have prompted conflict of interest accusations.

The president’s “crypto czar,” Silicon Valley investor David Sacks, will convene prominent founders, CEOs, and investors with members of a Trump working group to craft policies aimed at accelerating crypto growth and providing the legitimacy the industry has long wanted.

Guests will include twins Cameron and Tyler Winklevoss, founders of platform Gemini, with reports that Brad Armstrong of Coinbase and Michael Saylor, the boss of major bitcoin investor MicroStrategy, will also be in attendance.

Hanging over the crypto resurgence is the fate of FTX, the once-leading crypto exchange that collapsed spectacularly when its CEO Sam Bankman-Fried was found to have defrauded clients massively. He is now serving a 25-year term in a US jail.

For believers, cryptocurrencies represent a financial revolution that reduces dependence on centralized authorities while offering individuals freedom from traditional banking systems.

Bitcoin, the world’s most traded cryptocurrency, is heralded as an alternative to gold or as a hedge against currency devaluation and political instability.



– Crypto warnings –



Critics maintain these assets function primarily as speculative investments with questionable real-world utility, warning that excessive deregulation could leave taxpayers on the hook for cleaning up market crashes.

Law enforcement agencies see digital assets as a means to launder ill-gotten money.

The proliferation of “memecoins” — cryptocurrencies based on celebrities, internet memes, or pop culture rather than technical utility — presents another challenge.

Much of the crypto industry frowns upon this practice because they fear it tarnishes the business, amid reports of quick pump-and-dump schemes that leave unwitting buyers paying for assets that end up worthless.

Despite his previous hostility toward cryptocurrencies, Trump has embraced the technology, declaring his intention to make the United States a crypto world power.

His administration has already taken significant steps to clear regulatory hurdles.

On Sunday, Trump confirmed plans for a strategic cryptocurrency reserve where the US government would deposit digital currency holdings acquired mainly from judicial seizures.

Jacob Phillips of Lombard Finance called this potential move “one of the strongest endorsements the industry has ever seen,” noting that several founders and teams have already relocated to the United States in response to the improving regulatory climate.

Trump also appointed crypto advocate Paul Atkins to head the Securities and Exchange Commission (SEC).

Under Atkins, the SEC has dropped legal proceedings against major platforms like Coinbase and Kraken that were initiated during Biden’s term.

The previous administration had implemented restrictions on banks holding cryptocurrencies (since lifted) and allowed former SEC chairman Gary Gensler to pursue aggressive enforcement despite the absence of clear legal frameworks.



– ‘Pivotal moment’ –



Addressing ethics concerns, Sacks announced on X that he has divested from his substantial crypto holdings and investments, with industry figures quickly vouching for his integrity.

Friday’s summit “marks a pivotal moment for the digital asset industry,” according to Elitsa Taskova of Nexo, a cryptocurrency financial services platform.

However, meaningful change will likely require congressional action, where crypto legislation has remained stalled despite intense lobbying efforts by investors including Trump ally Marc Andreessen, an influential venture capitalist.

Some lawmakers remain hesitant, troubled by scandals and recurring reports of market crashes, theft and scams.

The recent $1.5 billion theft from the Bybit platform underscores the risks cryptocurrencies still present.

Nevertheless, Dante Disparte of Circle, which issues the dollar-pegged USDC stablecoin, sees growing bipartisan support for crypto legislation.

He attributed this emerging consensus to proposals that include strong transparency and anti-money laundering requirements alongside consumer and market protections.

The Crypto President Has Arrived, and the Grift Is Booming

With Donald Trump back in the White House, the floodgates for cryptocurrency scams have been flung wide open.

By Hadas Thier

February 1, 2025

Source: Jacobin


“You’re going to be very happy with me,” Donald Trump told thousands of rapt Bitcoin believers back in July. I was standing within the throng, having gone down to Nashville to cover the annual Bitcoin conference last summer.

The conference hall was chilly and darkened, but the energy level was feverishly high, the crowd whooping and hollering as the then-presidential hopeful hit all the right notes, calling Bitcoin a “miracle of humanity” and rattling off a list of promises — the most popular among them, to fire Gary Gensler, chair of the crypto-regulating Securities and Exchange Commission (SEC).

The SEC under Gensler was widely decried by the crypto community for what they claimed was the commission’s “reign of terror against crypto.” Trump also promised to commute the sentence of Ross Ulbricht, founder of Silk Road, a Bitcoin-fueled black market for drugs and contraband, and declared that he would create a “strategic national Bitcoin stockpile” with Bitcoin that has been seized by the Department of Justice.

Most of all, Trump vowed to help Bitcoin “skyrocket like never before, even beyond your expectations,” noting that Bitcoin prices surged by 3,900 percent during his first four years in the White House. “Now compare that to just after 3.5 years of [Joe] Biden and [Kamala] Harris adjusted for inflation. Bitcoin is up 50 percent. Now 50 percent sounds good, but not when you’re comparing it to almost 4,000 percent, right?”

Incidentally, during his first tenure in the White House, Trump had declared himself “not a fan” of crypto, complaining that the value of cryptocurrencies was “highly volatile and based on thin air.” But here we are in the dystopia that is 2025. Cryptocurrencies — digital tokens like Bitcoin, Ethereum, DOGE, and tens of thousands of others that can be created and traded on the internet using decentralized technology — are back in the mainstream. Their fraud and scam-riddled history remains, as does crypto’s lack of social utility and surplus of hype, speculation, and grift. And the newly converted Bitcoiner in Chief is now issuing $TRUMP, his own highly volatile meme coins, ostensibly conjuring up tens of billions of dollars out of thin air.

A Profitable Romance

The love affair between Trump and proponents of Bitcoin and other cryptocurrencies is a relatively new, sometimes rocky, but highly profitable romance. Bitcoin had spent 2024 regaining the ground its valuation had very suddenly lost in 2022; other cryptocurrencies have followed the trend set by Bitcoin. By springtime of last year, Bitcoin’s price had already broken its previously wild records, and by the November elections, it was nearing a $70,000 price. Once Trump was declared winner, that number indeed skyrocketed like never before, just as he had promised, breaking the $100,000 mark within weeks.

That profitability is a two-way street. The crypto rich showered Trump and other crypto-friendly candidates with heaps of cash in the lead-up to the election, and the industry organized an aggressive and unprecedented fundraising operation, to the tune of almost $200 million through their Fairshake PAC and aligned super PACs. At the Bitcoin conference alone, Trump reportedly raised a full $21 million, mostly through a “roundtable” meeting whose entry fee was $844,600. Photo-ops with the president were not included. Those cost another $60,000 a pop.

Beyond the elections, and with his usual flair for unabashed conflicts of interest, Trump has gotten in on the grift itself — from non-fungible token (NFT) projects (digital tokens linked to media files that can be traded and sold); to financial stakes in the World Liberty Financial project, which claims it will develop a crypto trading service; to launching his very own memecoin, which mainstream media sources giddily and falsely claimed increased the Trump family’s net worth to the tune of tens of billions of dollars. On Wednesday, the hits kept coming with the launch of Truth.Fi, a crypto-focused financial services platform.

Trump’s conversion to cryptocurrencies began at the end of 2022, with the launch of his NFT collections — thousands of ultracringe digital images of the president, photoshopped to take decades off his appearance, and mocked up into superhero, cowboy, or rockstar versions of himself. Trump’s business partner Bill Zanker told Bloomberg that the president approved every one of the images: “He spends hours on it. He enjoys it. He calls it pop art.”

Sales of the NFTs brought in a few million dollars, along with mockery from many corners (including among the more ideological within the crypto space), and a burgeoning relationship with crypto supporters and industry leaders. “He fell in love with this crowd: young, ambitious, not regulated,” Zanker said.

But the grift and narcissism of Trump’s NFT collections seems to pale in comparison to his latest foray into another corner of cryptocurrencies: memecoins.

Trump’s appropriately named $TRUMP coin along with Dogecoin, DogWifHat, FartCoin, Pudgy Penguin, and tens of thousands of other “memecoins” are cryptocurrencies inspired by memes or jokes, with no pretense of utility or value, beyond pumping up prices via social media hype, hoping the coin you bet on takes off, and then dumping them on unsavvy investors. In fact, on July 13 alone, shortly after the failed attempt to assassinate Trump on the campaign trail, more than 2,000 memecoins related to Trump were created on the popular memecoin website pump.fun.

Among the myriad Trump-related memes, the $TRUMP token is the “official” coin connected to Trump himself. On the eve of his inauguration, while industry leaders were throwing a lavish “Crypto Ball,” featuring Snoop Dogg and Soulja Boy, with tickets that went for thousands of dollars, Trump did not appear at the gala himself. Instead, he was busy launching his own coin.

Posting on his Truth Social account, he wrote: “My NEW Official Trump Meme is HERE! It’s time to celebrate everything we stand for: WINNING!” Its logo features an airbrushed image of Trump holding his fist in the air, overlayed with the words “FIGHT FIGHT FIGHT!”


The Melania coin soon followed. And even Trump’s inauguration pastor, Lorenzo Sewell, launched the Lorenzo coin with an accompanying video on Twitter/X just hours after he delivered his inaugural benediction: “I need you to do me a favor and go and get that coin, in order for us to accomplish the vision that God has called us to do on our earth.”

The Adults in the Room

For many in the industry, the crypto president peddling his own memecoin soured their moment of euphoria. Tom Schmidt, a partner at a crypto venture capital firm Dragonfly, bemoaned, “I really was kind of bummed out when I saw it. It just felt very grifty and cheap.” Nic Carter from another crypto investment firm complained that the president’s meme “does the opposite of validating” the industry. “Now, on the cusp of getting some liberalization of crypto regulations in this country, the main thing people are thinking about crypto is, ‘Oh, it’s just a casino for these meme coins.’”

What the more serious adults in the crypto room want is two things: mainstream validation, and the ability to continue to operate without regulation or oversight. Ironically, a movement that was founded on a libertarian, anti-government ideology has come to rely on the government itself to force open these doors. Former PayPal CEO and now the “White House AI and Crypto Czar” David Sacks announced at the Crypto Ball: “The beginning of innovation in America for crypto has just begun.”

In the wake of the spectacular implosion of Sam Bankman-Fried’s unregulated crypto exchange, FTX, the Biden administration, and the SEC spent two years filing legal complaints against crypto companies and making it clear that the commission considered digital assets to be securities — a classification that comes with significant oversight. But the government was in no position to go after every one of the hundreds of thousands of new crypto tokens and assets. Instead, it targeted the exchanges that sold them, and also set forth guidance to banks, discouraging them from offering crypto custody services to their customers.

Truthfully, the regulatory warpath of the SEC was not all that powerful. It was an attempt to catch up with an industry that had been allowed to make up its own Wild West versions of financial assets, with no guardrails to protect millions of every-day new crypto investors whose interest was piqued by an avalanche of celebrity endorsements and the promise of breaking out of financial hardship. But now good times are here for the industry again. Sacks himself has already gone on record saying that Trump’s and others’ memecoins are collectibles, not securities.

Certainly, the crypto industry, riding high with absurdly lofty expectations, has had some early disappointments. First, Trump dropped his own memecoins, without warning or discussion with those industry bigwigs who were busy celebrating his inauguration at Crypto Ball. Then, rather than appoint a “crypto czar” from within their industry, the crypto movement had to settle on sharing the limelight with AI, with a “crypto and AI czar” that is merely friendly and hates regulations rather than a true crypto believer himself.

Finally, the much-anticipated crypto executive order essentially stated what was already going to happen: a deregulatory overhaul of the SEC and Commodity Futures Trading Commission (CFTC). Instead of announcing a Bitcoin Strategic Reserve, the order sets forth a working group that will “evaluate the potential creation and maintenance of a national digital asset stockpile and propose criteria for establishing such a stockpile.” This sparked a round of infighting within the industry between the Bitcoin purists who want only Bitcoin in the stockpile, and proponents of other crypto assets, some of whom seem to have lobbied the administration to widen the scope of the reserve. At the end of the day, the order was mostly symbolic and vague — as crypto researcher and critic Molly White put it, it amounted to “nothing much” at all.

But whatever the details and limitations, there’s no doubt that crypto has already gotten its primary wish fulfilled: to be able to play in its multitrillion-dollar sandbox with its own rules to its own benefit. Even the $Trump coin, as grifty and unserious as it makes the industry look to be, will ultimately onboard many more unwitting consumers into the Wild West of crypto, fostering wider adoption and growth for the industry as a whole. More people and more mainstream financial institutions will be convinced to invest in crypto. And the specter of enforcement actions against companies developing, selling, and promoting these assets has faded into the past — as though the billions of dollars lost to crypto fraud and scams never happened at all. These are truly dark, meme-filled days.

Trump’s crypto-ligarchy will blow up in his face — and possibly take the financial system with it

Image via Shutterstock

Robert Reich

January 27, 2025


Friends,

As of Friday, the Trumps’ cryptocurrency meme coins — the $TRUMP and $MELANIA cryptocurrency coins — had a combined market value of about $6 billion.


Days before taking the oath of office, Trump announced on his social media platform the creation of the $TRUMP coin, featuring Trump’s image from the July assassination attempt, and said: “Join the Trump Community. This is History in the Making!”

The $MELANIA coin soon followed.

Despite no details about the coin’s value, use, or risks, Trump supporters. gamblers, and those wishing to suck up to Trump bought it — sending the coin’s price into the stratosphere. On paper, the Trump family is now several billion dollars richer.



















Trump once denounced crypto, but as the crypto industry poured tens of millions of dollars into 2024 campaigns, he changed his mind. Not only did he see the political power of the crypto industry; he saw an opportunity to make a pile of money.

He then promised to make the United States the “crypto capital of the planet.”

In September, the Trump family started World Liberty Financial, which they marketed as a platform to facilitate borrowing and lending in digital currencies. (Trump receives a cut of the sales of WLFI, the cryptocurrency associated with the platform.)
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Now that he’s taken office, Trump plans to make billions off his presidency by implementing policies that favor crypto.
The truth about crypto

Cryptocurrencies serve no useful purpose other than the purchase of other crypto assets, money laundering, extortion and scams. As economist Paul Krugman has said, their market value rests on nothing but “technobabble and libertarian derp.”


They also use huge amounts of energy.

And if they infiltrate Wall Street, they could destabilize the entire financial system.

The crypto industry has a dubious reputation. Sam Bankman-Fried, founder of FTX, one of the world’s biggest crypto exchanges, was last year sentenced to 25 years in prison for fraud. Changpeng Zhao, founder of a rival exchange, has spent four months locked up for money-laundering.

But the richest people in America with huge power — the oligarchy, including Trump — support cryptocurrencies. Not only can they make a fortune, but crypto advances their longterm aim of shifting financial controls out of a democratically elected system of government and into their own hands.

Trump II and crypto

Now that he’s president, Trump is actively promoting crypto — reversing Biden’s attempts to prevent the crypto industry from infiltrating Wall Street.

Biden’s tight rules made it prohibitively expensive for banks to hold digital assets on behalf of clients, and stopped them from developing their own crypto products, such as stablecoins (tokens pegged to the dollar or other assets).

The Federal Deposit Insurance Corporation (FDIC), a watchdog, stopped dozens of such projects on the basis that it did not know how digital assets ought to be treated in regulatory filings.


With Trump, though, banks and the crypto industry are now pushing in the same direction, and face little resistance. New and enormously profitable forms of risk-taking are emerging — for a small group of people able to take such risks and able (like the Trump family) to profit of their own crypto products.

Trump is putting crypto-friendly people into place at key federal agencies, boosting its prospects. In December, he picked Washington lawyer Paul Atkins, a known crypto booster, to chair the Securities and Exchange Commission, America’s main financial regulator.

Last week, the Securities and Exchange Commission altered its guidance so that financial institutions no longer have to account, on their own balance-sheets, for crypto assets held on behalf of customers. The S,E.C. rolled back accounting guidance that had deterred banks from getting involved with crypto.

Trump has tapped the venture investor and digital currency enthusiast David Sacks to oversee administration policies on crypto (and artificial intelligence).


Then, this past Thursday, Trump issued an executive order committing the Trump administration to “protecting and promoting” the crypto industry:
“The digital asset industry plays a crucial role in innovation and economic development in the United States, as well as our nation’s international leadership. It is therefore the policy of my administration to support the responsible growth and use of digital assets.”


The order gives his administration authority to establish a national cryptocurrency stockpile — a stash of digital coins that the crypto industry has spent months lobbying the new administration for because it further legitimizes crypto and adds to the demand for it.

Trump’s order also prohibits the creation of a “central bank digital currency,” overseen by the government. And the order promises “fair and open access to banking services” for crypto (responding to complaints from crypto companies that banks have denied them accounts).

In effect, Trump is writing the rules for a business venture from which he and his family are personally profiting. It could earn them hundreds of billions of dollars.

If you’re outraged by this, fine. You’re probably outraged by a large number of things Trump has done since January 20.
The larger picture

The real significance of such blatant profiteering off the highest office in the land is what it reveals — not just about Trump but about the entire oligarchic enterprise he fronts for. It is likely to contribute to a vast wave of public alarm and disgust.

Just as Elon Musk is demonstrating how huge wealth can create enormous personal political power, Trump is demonstrating how enormous personal political power can create huge wealth.

Musk sank a quartet of a billion dollars into electing Trump, and was rewarded with a key spot as director of the so-called department of government efficiency, or DOGE (Dogecoin, itself a cypto token, has benefited from Musk’s vocal support) — creating vast conflicts of interest over crypto and Musk’s myriad businesses (X, SpaceX, and Tesla, which are regulated by federal agencies and also major government contractors).

This dynamic — great power creating huge wealth, and huge wealth creating great power — is central to the oligarchic takeover of America. And both are premised on the corruption of democracy.

Any wealthy person, corporation, or foreign leader wishing to curry favor with Trump now has a particularly easy means — just buy $TRUMP and $MELANIA cryptocurrency tokens.

The corruption will grow worse because neither Trump nor Musk has any sense of limits. Nor do any of the oligarchs surrounding them, such as David Sacks, who Trump picked to oversee his administration’s policies on crypto and artificial intelligence.

Like Musk, Sachs serves as a "special government employee,” which does not require Senate confirmation or full financial disclosure, and allows Sacks to maintain his business interests while influencing policy. Expect more conflicts of interest.

As crypto and banking begin to merge, bank deposits will become more vulnerable to movements in the crypto market, and banks more vulnerable to runs. That’s what happened at Silvergate and Signature, two crypto-focused banks which collapsed in 2023. Both were broken by a tumble in cryptocurrency prices that began in late 2021 and then reverberations from FTX’s collapse.

The biggest beneficiaries of all this are the highest rollers — the oligarchs who have been pushing crypto for years. And now Trump is in on it and stands to personally gain billions, as will those seeking to curry his favor by buying his coin.
The endgame

The American public doesn’t abide flagrant self-dealing. We don’t want public officials personally profiting by decisions that are supposed to be made in the public’s interest.

You may be thinking: “But Trump has been profiteering for years off his presidency, as have members of his family. And they’ve gotten away with it.”

True, but what’s happening now is much bigger and far more visible. It involves an entire industry (crypto), and conspicuous members of the American oligarchy who are investing in it, including the President and officials around him.

And it’s inherently risky. For oligarchs, the rise of digital finance provides large moneymaking opportunities. But for the rest of us, it increases the risk of another financial crisis.

Unbound greed combined with unconstrained power is an explosive combination. When the blowup comes, it will take Trump, Musk, and the oligarchy with it.