"Legal" Harvesting? The Interest Chain and Scandal Behind the Trump Couple's Meme Coin Frenzy

Original authors: Zeke Faux, Max Abelson, Bloomberg

English compilation: Saoirse, Foresight News

A few days before Donald Trump returned to the White House, George Santos was walking up the steps of the nearby Andrew W. Mellon Auditorium. It was January 17, the kickoff of presidential inauguration weekend, and the notorious former U.S. congressman was about to enter a $2,500 "cryptocurrency gala."

Santos strode past a row of men in tuxedos and entered the neoclassical building. Inside the auditorium, House Speaker Mike Johnson was taking selfies with influencers and lobbyists from the cryptocurrency world, while Donald Trump Jr. filmed a TikTok video. Child star Brock Pierce, who once starred in "The Mighty Ducks," was also present—he is now a co-founder of an $180 billion cryptocurrency company; Trump's political advisor Alina Habba was playing a claw machine. Incoming Treasury Secretary Scott Bessent and former dating coach Zak Folkman were also there, with Folkman now being one of the Trump family's partners in the cryptocurrency business.

Before Snoop Dogg took the stage as DJ, some attendees pulled out their phones to check the announcement made by the elected president on his social media platform, Truth Social: he had launched a cryptocurrency named "TRUMP." "Have fun!" he wrote, and the price of the coin immediately soared. Some at the gala were furious for not buying in early, while others suspected Trump's account had been hacked. "This has to be fake," a cryptocurrency founder said to a colleague.

But it was real—not that TRUMP had actual investment value, but it was not a hacker's fabrication. In fact, it belonged to the category of "Meme coins," a type of digital token entirely reliant on hype. That same weekend, his wife Melania also launched her own Meme coin, "MELANIA." The scene resembled the Trump family setting up slot machines emblazoned with the "Trump" logo all over the National Mall.

The prices of these tokens skyrocketed, and within hours, the market value of the tokens held by the Trump family and their business partners surpassed $50 billion. Subsequently, the prices plummeted, leaving hundreds of thousands of ordinary investors with nothing. According to estimates from cryptocurrency analytics firms Chainalysis Inc. and Bubblemaps SAS, the Trump team may have cashed out over $350 million.

Aside from a few who made a fortune, almost no one left the debacle satisfied. Critics accused it of corruption—they believed TRUMP was essentially a scheme to "allow foreign investors to anonymously funnel unlimited funds to the new president"; cryptocurrency traders accused the Trump family of orchestrating a scam. Meanwhile, the new administration assured the public that "everything is compliant." "The president and his family have never been involved in conflicts of interest in the past and will never be in the future," White House spokesperson Karoline Leavitt later stated in an interview with Bloomberg Businessweek.

January 2025, Cryptocurrency Gala outside the Mellon Auditorium in Washington. Photographer: Mark Peterson /Redux

Meme Coins: An Unregulated Nihilistic Gamble

The entire event operated almost semi-publicly, but no one knew how the Trump couple launched these tokens. Someone must have explained the nature of Meme coins to them and the enormous profits they could bring—there's no way an older politician and a middle-aged model could independently create digital tokens on the blockchain. But who were their "mysterious partners"? Only these people knew how the Trump couple extracted massive funds from their supporters.

"I know I launched it, but I know nothing about it. I just heard it was successful," Trump responded to questions about the tokens at a press conference on his inauguration day.

To unravel the mystery, one must start with the origins of Meme coins. This unregulated, nihilistic "gamble" has swept through the cryptocurrency world, involving several key figures: a college student founder who made a billion dollars with Meme coins; a 29-year-old young man who sparked a national scandal in Argentina and was dubbed "The Phantom"; and a cryptocurrency executive from Singapore—who goes by "Meow," with a profile picture of a cartoon cat wearing an astronaut helmet.

These individuals collectively established a new standard for "turning hype into cash," setting the stage for "presidential-level profits" that year. Now that the Meme coin craze has subsided, it reveals a reality: as the Trump administration relaxed financial regulations, the market descended into chaos when the rules were set by the "hype merchants" themselves.

The birth of Meme coins was originally a joke. In 2013, two software engineers chose a "Doge" meme—already a popular inside joke on forums like Reddit and 4chan—as the logo for a new cryptocurrency named "Dogecoin." They intended to mock the proliferation of various digital currencies following Bitcoin, but investors flocked in, and within weeks, Dogecoin's market value surpassed $12 million. Fans even sponsored a NASCAR team, covering the car with Dogecoin advertisements.

"I sincerely hope that after seeing Dogecoin's situation, people don't turn every popular internet meme into a token," one of the Dogecoin founders expressed concern in an interview.

But contrary to expectations, Meme coins continued to emerge over the years, despite the ups and downs of the cryptocurrency market. After Elon Musk began promoting Dogecoin in 2021, the pace of launching such tokens accelerated dramatically, with a variety of Meme coins like Dogwifhat, Bonk, and Fartcoin appearing one after another.

Their "success" almost defied all financial principles: even the biggest bubbles in the stock market were at least based on optimistic expectations about a company's or industry's potential (no matter how tenuous); whereas Meme coins have never had any actual products or cash flow—by traditional business valuation standards, they should be worthless. The only way Meme coin buyers could make money was by getting others to buy these "useless tokens" at higher prices. Essentially, they were speculating on speculation itself.

"According to the efficient market hypothesis, this shouldn't work, but the reality is, it does make money," said Alon Cohen, co-founder of Pump.fun, in an interview with Bloomberg Businessweek's "Meme Coin Primer." Pump.fun is currently the hottest platform for creating and trading Meme coins, and few have made more money than Cohen during this craze. He revealed that the platform has facilitated the issuance of about 1,400 Meme coins (not including the Trump couple's tokens), and according to Pump.fun's estimates, since January 2024, the platform has accumulated about $1 billion in trading fees alone.

22-year-old Cohen has short black hair and a scruffy beard. Sitting in a café in downtown Manhattan, he appeared restless, expressing concerns about "new wealth being coveted"—recently, there have been frequent violent robberies in the cryptocurrency sector. Even though the company's legal name can be found in public records, he was reluctant to disclose his country of residence or the company's real name.

Cohen opened Pump.fun on one of his three phones, demonstrating how the Meme coin market operates: the platform's interface is rough and retro, filled with flashing pixelated icons, each corresponding to a token. Creating a token requires just a few clicks—no programming, no paperwork, and not even an understanding of the details of trading on the Solana blockchain.

Any trending topic or news event online can potentially be turned into a Meme coin—even tragedies like "Charlie Kirk's assassination" have spawned thousands of related tokens. To attract attention, token creators perform outrageous stunts: staging pornographic acts, consuming fentanyl, or beheading live chickens (it's hard to discern which are real). Among the tokens Cohen browsed, some even bore racially offensive names. He explained that the platform has a switch to "hide offensive content," and the review team filters out illegal content.

Buying Meme coins on the platform is equally simple: initial prices start at just a fraction of a cent, rising according to a specific formula based on demand. Pump.fun's users are primarily young men and active online communities—they often discuss trading on platforms like X and Discord; once a token gains