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Donald Trumpwill welcome the leaders of major cryptocurrency and prediction-market companies to the White House on Wednesday to discuss how they should be regulated—a potential make-or-break moment for nascent industries that have struggled to establish themselves as credible and legal.
As it happens, Trump himself is a crypto and prediction-market leader. The president and his adult children are major investors in both industries.
In the past, presidents have divested from their business interests while serving, or have taken pains to distance themselves from any involvement. During his second term, Trump has done essentially the opposite. And his hand in the regulation of two industries he’s directly involved with is merely one headline from this president’s Financial Conflicts News of the Week.
Consider World Liberty Financial, a crypto firm Trump co-owns, in which a senior government official from the United Arab Emirates acquired a $500 million stake just months before the administration, ignoring national security concerns, agreed to provide the UAE with America’s most advanced AI chips.
World Liberty Financial calls itself as a “de-fi” company—as in de-centralized finance, the idea that you can do most banking activities through the crypto blockchain rather than at a real bank. And as it happens, Trump’s company just got the greenlight from one of Trump’s regulators to be a bank.
Under the charter it was granted, World Liberty won’t do much in the way of traditional banking (no deposits or loans) but it will make it much easier, and profitable, for the firm to issue crypto tokens. That’s not a traditional use of a bank charter.
The ambiguity around what these crypto and prediction firms really do, how they should be regulated, and whether they should be treated differently than traditional banks, puts Trump’s business interests at the bleeding edge of the debate over these industries. These issues are essentially the agenda for Wednesday’s White House meeting and a subsequent regulatory meeting on Thursday.
Another example of a Trump business foray that would likely be scrutinized by regulators—if regulators are allowed to scrutinize the new crypto and prediction markets—is his meme coin ($TRUMP), an inherently worthless bit of digital branding that has netted him around $635 million while costing “investors” around $3.8 billion as its value fell to almost zero. It’s the kind of financial shenanigan into which, in a less corrupt administration, government regulators might be inclined to look.
Another major Trump asset is his stake in Truth Social, which has tethered itself to the crypto industry by acquiring lots and lots of Bitcoins—astrategy that has proved unwise, at least in the short term, as Bitcoin prices have declined more than 25 percent this year.
Trump has made no secret of his support for the prediction markets—he has publiclybacked them in their fight to avoid state regulators who have tried to rein them in.
The White House did not return a request for comment, but its standard denial of Trump’s financial conflicts usually includes the claim that his adult sons, Eric and Don Jr., are in charge of his finances. If anything, those two are even more involved than their father in the crypto and prediction industries that Trump will determine how to regulate—or not regulate. In addition to helping manage his father’s crypto investments, Eric has his own crypto-mining company—American Bitcoin. Don Jr. is closely linked to the prediction industry: Kalshi gave him a stake that has become enormously valuable, and he sits on an advisory committee for Kalshi’s chief rival, Polymarket.
Wednesday’s meeting is a warm-up for the much more formal and significant meeting on Thursday, when the Commodities Futures Trading Commission, one of two major government agencies that regulate investments, holds the first meeting of a new committee that will determine how the government regulates the markets in question.
Trump is never all that predictable (he did once call crypto “a scam”), but it’s a good bet that the committee—which is stacked with crypto and prediction market reps, including Trump associates, many of whom will be at Wednesday’s event—will get a warm White House welcome.
Source: www.motherjones.com