Trump makes it easy for crypto scammers
The Trumps are launching their own coins – and half of America is going crazy. A questionable and dangerous development, says Mark Mantel.
(Image: WeiĂźes Haus)
Donald and Melania Trump's announcements about their cryptocurrencies read like straight-up scams from hacked social media accounts. “My NEW official Trump meme is here. […] GET YOUR $TRUMP NOW.”
Hacks with similar text have happened countless times to major Twitter accounts. It's just that Donald and Melania's social media teams haven't lost the account data. Rather, they are really promoting their meme cryptocurrencies. These coins have no use apart from allowing fans to invest in a cult of personality.
Trump & Co. are legitimizing these types of posts – they are no longer a clear indication of a hack. This makes it even easier for gullible people to be fooled.
Blurring the line
There are certainly parallels to crypto scams with Trump coins. Both “$TRUMP” and “$MELANIA” were launched via a decentralized trading platform (DEX). Based on existing blockchains such as Solana or Ethereum, every Hans and Franz can create their own coin or token. There are even services that do most of the work for them. It only takes half an hour to create a few pretty banners and a quick website.
In the process, you determine a trading pair – here TRUMP-USDC (US dollar coin worth one real US dollar) – and throw a little money into a liquidity pool. Interested parties can then use this pool to buy the created coin. This also increases the pool value for the issuer.
In a typical scam, the scammers often suddenly withdraw all their funds from the liquidity pool, rendering the trading pair worthless.
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In a second method, the issuer buys coins after the launch with the aim of reselling them after an increase in value without completely crashing the price. This is where the Trump coins show conspicuous features.
In the first minute after Donald Trump's truth social post about his own cryptocurrency, there were two transactions. Someone bought 5,971,750.5 TRUMP directly for just under 1.1 million US dollars. The unit price was around 18.4 US cents. The buyer must have prepared accounts and wallets accordingly for the transaction to work so quickly. In just a few hours, prices of 50 US dollars and more meant hundreds of millions of US dollars in profits.
The same wallet transferred USDC to another wallet on the weekend, which bought Melania Trump's coin two minutes before the announcement. “Only” for 40,000 US dollars, but still with a profit in the millions.
Insiders could have made money with the currencies, even though the Trump teams keep the majority of the coins behind a barrier and will not have access until April.
Incomparable
If you didn't know any better, the whole thing is a bit like a crypto scam on steroids. Trump enjoys presidential status and has many supporters to promote his projects. Presidential status is also likely the reason centralized exchanges such as Binance and Coinbase are quickly listing the coins –, further fueling the price.
Meanwhile, a third coin illustrates what the new reality in the crypto world looks like: The co-founder of “Students for Trump”, Ryan Fournier, created the unofficial “Official TikTok Coin”, advertised it via X and sold everything quickly after launch for a profit of just under one million US dollars. On X, he blames others.
More than ever, caution is advised when investing. Nobody deserves blind trust, especially when a cryptocurrency is being advertised.
(mma)
