California Representative Maxine Waters, a Democrat and ranking member of the US House Financial Services Committee, warned lawmakers that President Donald Trump’s memecoin has potentially opened the door to corruption and risks to national security.
In a Jan. 22 organizational meeting for the committee to adopt rules and an oversight plan in the 119th session of Congress, Waters said it was “alarming” that the Republicans’ plan — the party has majority control in the House of Representatives — did not include oversight of crypto firms and other financial institutions.
She referenced tech billionaires and CEOs attending Trump’s inauguration inside the US Capitol Building on Jan. 20, while many were left out in the freezing temperatures and took aim at the Official Trump (TRUMP) token launch.
“[T]he plan is notably silent about reviewing the actions taken by the current President, including potential conflicts of interest that may put our national security at risk,” said Waters. She continued:
“Hours before Trump took office, he and his family launched memecoins that have shot up in value, reportedly increasing his personal wealth and possibly providing a backdoor for sanctioned persons, hostile governments, and other bad actors to give money to Trump directly.”
Related: US Dems choose leadership for committees crucial to crypto policy
Waters kept her position as the top Democrat on the committee as Arkansas Representative French Hill took over as chair on Jan. 3 following the departure of Patrick McHenry. The committee is one of a few in Congress that could be crucial to crypto policy, as many in the industry expect lawmakers to work toward establishing regulatory clarity and not cracking down on digital assets.
Hill said Republicans’ “ambitious agenda” for the new Congress included policies to expand financial literacy and banking opportunities. In regard to digital assets, the committee chair said establishing legal clarity would be the focus, hinting at rules for the US Securities and Exchange Commission and Commodity Futures Trading Commission:
“We will bring legal clarity to digital assets, providing innovators with new tools to build decentralized financial products and services that can empower people to help one another and ensure America will remain a leader in this financial technology.”
Trump memecoin criticized as a cash grab
The then-president-elect launched the TRUMP token on Jan. 17, just two days before his wife, Melania, introduced her own branded memecoin. Both projects have been widely criticized — even among some crypto enthusiasts and Trump supporters — for allegedly trying to capitalize on the office of the presidency.
On Jan. 20, Waters claimed Trump could attempt to rug pull the memecoin’s investors, who would be “left holding the bag” if insiders sold their stakes:
“Through his memecoin, Trump has created a way to circumvent national security and anti-corruption laws, allowing interested parties to anonymously transfer money to him and his inner circle.”
The price of the coin dropped significantly before Trump’s inauguration. However, since its launch, the price has risen more than 400% and reached a market capitalization of more than $14 billion.
Related: What the release of Trump’s memecoin signals for crypto regulations