Watchdogs say cryptocurrency regulation and enforcement has plummeted while the Trump family invests heavily in it, raising significant ethical concerns.
Watchdogs Allege Conflicts of Interest and Economic Risks
As the Trump administration reduces regulations for the cryptocurrency industry, the crypto firm World Liberty Financial, in which the Trump family has a large financial stake, has experienced rapid growth. This has prompted watchdogs and experts to warn of potential conflicts of interest and economic hazards.
Deregulatory Actions Spark Concern Among Democrats
Key congressional Democrats are raising red flags about the U.S. president’s growing conflicts of interest involving cryptocurrencies, and the risks to investors and the economy posed by multiple deregulatory crypto actions at federal agencies. Since taking office again, Trump has appointed crypto industry allies to key positions, leading to a softening of industry oversight, which troubles critics. Furthermore, the Justice Department has announced it was disbanding a national cryptocurrency enforcement team.
Trump Family’s Crypto Ventures Under Scrutiny
Meanwhile, World Liberty Financial, promoted by Trump’s sons Eric and Don Jr., has unveiled its stablecoin. Critics warn that proposed legislation would further ease regulations on stablecoins, as concerns rise that these assets are being used for money laundering by criminal organizations. Trump’s support for digital currencies has prompted economists and Senate Democrats to voice concerns about conflicts of interest and broader economic threats.
“Trump and his family are clearly eager to establish a broad foothold in the sector prior to further regulatory actions that are likely to boost crypto asset valuations,” said Cornell economist Eswar Prasad.
Senator Elizabeth Warren has also expressed strong concerns, stating, “Donald Trump is enriching himself and his family through their crypto businesses while his administration guts oversight of the market. It’s a massive conflict of interest and a recipe for disaster.”
Concerns Raised Over Potential for Illicit Activities
Concerns have been raised regarding the potential use of cryptocurrencies in illicit activities, including drug trafficking. Reports indicate growing use of crypto by Chinese producers and exporters of fentanyl and other synthetic drugs. This has fueled the fears of watchdogs and crypto experts about the extent of Trump’s crypto deregulation and the risks involved.