Senator Elizabeth Warren, ranking member of the House Banking Committee, is asking federal agencies to investigate whether President Donald Trump’s recent launch of a meme coin violated ethical or regulatory standards.

The Massachusetts lawmaker, alongside Representative Jake Auchincloss, directed the request to the heads of the U.S. Office of Government Ethics (OGE), the Treasury Department, the Securities and Exchange Commission (SEC), and the Commodity Futures Trading Commission (CFTC).

Concern Over TRUMP, MELANIA

In a letter dated January 22, the Democratic legislators shared their unease over the launch of the Official Trump (TRUMP) and Melania Meme (MELANIA) tokens. According to them, the cryptocurrencies allowed the head of state to earn “extraordinary profits” using his position.

They noted that the President’s family business and affiliates hold 80% of the TRUMP meme coin’s supply, and his net worth shot up by at least several billion USD as the coin’s value rose last weekend.

Warren and Auchincloss also highlighted that anyone, including foreign leaders, could secretly use the cryptocurrency to gain influence over Trump.

“Anyone, including the leaders of hostile nations, can covertly buy these coins, raising the specter of uninhibited and untraceable foreign influence over the President of the United States,” the letter read.

Further, they pointed out that meme coins are infamous for rug pulls and scams, suggesting that Trump and his associates could dump their holdings, make lots of money, and crash the coins price. They also emphasized how the terms of the two tokens purport to indemnify them from fraud-related claims, meaning buyers may not be able to sue or join class action lawsuits against their issuers. This, in the legislators opinion, made TRUMP and MELANIA “ripe for market manipulation.”

The Senator and the Congressman also observed a possible conflict of interest: the President could directly benefit from selling crypto while also being in a position to appoint the people responsible for crafting policies to regulate the digital asset sector.

“He will be in a position to seek commitments from agency heads, to not only decide how the market is valued, but to implement lax policies to crack down on crypto scams like pump-and-dump schemes that are regularly conducted through meme coins,” the two claimed.

Questions for Regulators

Warren and Auchincloss concluded their missive with several questions for the government agencies addressed, including one to the OGE, about whether it was aware of any other president-elect who launched a business hours before taking office. They also wanted to know if there were any ethics rules the President and First Lady could be subjected to regarding their meme coin holdings.

From the Treasury, the legislators wanted to know if U.S. corruption laws prevent foreign actors from buying cryptocurrencies like those issued by Trump and whether there is a way to track and identify people or entities that buy the coins.

The SEC and CFTC, which recently got interim heads, were also put on the spot and asked if they had any authority to handle “threats posed by meme coins.” Additionally, the Democratic politicians wanted to know whether the agencies would investigate investor complaints against the TRUMP and MELANIA tokens. All queries are expected to be answered by February 4.