Senators Elizabeth Warren (D-Mass.) and Richard Blumenthal (D-CT) on Monday asked the SEC to investigate President Trump’s TRUMP (CRYPTO: TRUMP) meme coin, calling it a potential “illegal scam.”
What The Senators Are Actually Alleging?
Warren and Blumenthal sent the letter directly to SEC Chair Paul Atkins, arguing the meme coin may have facilitated illegal fraud or unjust enrichment, CNN reported.
They raised the possibility of a “soft rug pull,” a scheme where developers gradually withdraw price support rather than abandoning the project all at once, leaving retail buyers absorbing the losses over time.
The $TRUMP coin peaked at roughly $9 billion on January 19, 2025, the day before Trump’s inauguration, with 80% of supply held by Trump Organization affiliates.
It now trades below $400 million, a 97% decline from its peak.
Nearly 1 million people lost money on the coin, racking up $3.8 billion in total losses through the end of June, according to crypto analytics firm Nansen cited by The New York Times.
Meanwhile, Trump himself made nearly $636 million in royalty and licensing fees related to “Celebration Coins” last year alone, according to his 2025 financial disclosure.
“The SEC must be willing to enforce the law even when potential wrongdoers include those with powerful political connections,” the senators wrote.
What TRM Labs Said About The Rug Pull Question?
Blockchain intelligence firm TRM Labs analyzed the Trump memecoin in January 2025 and concluded it did not carry the hallmarks of a traditional rug pull.
Ari Redbord, former federal prosecutor and now global head of policy at TRM Labs, told CNN that finding still holds today.
But Redbord did not let the project off the hook entirely. He pointed out that a small group of early buyers profited while nearly a million retail investors absorbed losses at scale.
“Eighty percent of supply sitting with a small group of investors and close to a million retail buyers absorbing the losses is going to look worse with time, not better, whether it was a rug pull or not,” he told CNN.
Does The SEC Even Have Jurisdiction?
The SEC issued guidance in February 2025 stating that meme coins are not securities and that memecoin holders are not protected under federal securities laws.
However, the agency also said the guidance does not apply to products simply labeled meme coins to evade securities law, and that each coin would be evaluated on a case-by-case basis.
Warren and Blumenthal argue the Trump meme coin is exactly one of those cases that warrants evaluation.
The SEC declined to comment on the letter.
The White House referred questions to the Trump Organization.
Photo via Shutterstock
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