Trump and crypto. This is a marriage that should terrify us all, as well as those of us living in the developing world. It's not just about the ex-president seemingly reversing his earlier, more skeptical stance on crypto; it's about the potential devastation his laissez-faire approach could unleash on communities already struggling to get by.

Crypto Deregulation: Who Really Benefits?

Let's be blunt. It’s never the small guy that wins out when rules are relaxed. Trump's SEC, Justice Department and other agencies are easing regulations on crypto, reversing Joe Biden's policies. As with any period of destabilizing deregulation, the cryptocurrency free-for-all has fostered tremendous disorder. So scams flourish, with the most vulnerable often paying the price. We’re suggesting that the SEC take a step back from pursuing cases like these crypto frauds. Who does that really help?

Think about South Africa, where I'm from. We do have a can-do attitude and wonderful entrepreneurial spirit, but we have a huge amount of poverty and financial illiteracy. We know that crypto, with its promise of easy wealth, can be extremely alluring. Without meaningful oversight, the space opens itself up to plenty of Ponzi schemes and rug pulls. These scams exploit the dreams of people who are often the least able to absorb the loss.

It’s no coincidence that the FBI announced record losses associated with crypto fraud totaling $5.6 billion in 2023. The $Trump memecoin dinner did indeed raise an impressive $148 million, making the highest spenders eligible for private White House tours. It seems more like innovation and more like today’s Gilded Age feeding frenzy. It’s all the more disheartening when you realize that a lot of it was purchased by anonymous and foreign buyers.

The Forgotten Victims of Crypto's Wild West

I’ve heard from others back home who poured their entire life savings into crypto projects. They made their decisions purely on hype and the attraction of astronomical returns. To them it represented the escape hatch from poverty, the opportunity for their kids to have a better life. Instead, they lost everything. They were promised the moon, and went in only to be burned.

This isn't just about money. It’s the story of hopes and dreams dashed, families torn apart and a terrible feeling of having been sold out. The SEC easing regulations and pausing or ending 12 cases involving cryptocurrency fraud, including cases involving Justin Sun's crypto companies, is a stab in the back to these victims. Trust in the system among voters is quickly eroding. People want to believe that the mighty are not getting away with murder while fleecing the populace.

North Korean hackers stole a record $1.34 billion in cryptocurrency in 2024, allegedly to fund weapons programs. Crypto’s anonymity has made it the ideal tool for illegal activities like money laundering which can destabilize entire countries and threaten years of development work.

  • Scams and Fraud: Target those with limited financial literacy.
  • Market Volatility: Exacerbate existing inequalities.
  • Illicit Activities: Money laundering, terrorism funding.
  • Destabilization: Undermine development efforts.

Trump's Crypto Cozying: Corruption or Coincidence?

Am I the only one who sees a blatant conflict of interest here? Trump and his sons allegedly own a 60% interest in World Liberty Financial (WLF). In advance of this IPO the company has raised over $500 million. WLF led the charge to dump $2 billion investment from an Abu Dhabi sovereign fund into Binance. This investment is significant, not least because of Binance’s troubled history.

According to a press release, the Trump family receives 75% of the proceeds from sales of the new crypto token. That is a lot of money.

Then add on top of that the Justice Department shutting down its national cryptocurrency enforcement team. The Department of Labor rolling back a Biden-era caution against 401k plans pouring money into crypto. It's a pattern, and it's not pretty.

While it’s convenient to label these concerns as “political,” that’s selling this debate short. Much more is at stake than just partisan trickery. It’s a question of integrity of our institutions, our commitment to the rule of law, and providing safe spaces for some of our most vulnerable communities. When the powerful use their positions to enrich themselves at the expense of others, it undermines the very foundations of a just society.

Is Trump just using his position to shake down companies and get them to pay him? Critics and ethics watchdogs think so. Are we really comfortable with the idea that the President of the United States is on the front lines defending a sector swimming in fraud and criminal enterprise? If so, it should raise serious concerns.

Here's the unexpected connection: Trump's crypto dealings echo the predatory lending practices that devastated communities during the 2008 financial crisis. Similar to how subprime mortgages were packaged and sold to naive investors, unregulated crypto assets are being pushed into at-risk communities. Most of these people are unaware of the risks they are taking.

Demand transparency. Elect federal and state politicians who are committed to consumer protection and increasing consumer financial literacy. And perhaps most importantly, educate your friends and family about the dangers of unregulated crypto markets. So, let’s not let Trump’s crypto cronies con the rubes and pick their pockets to fill their own sordid, personal coffers. The stakes are far too high.