'Whizbang Ponzi scheme': Analyst warns foreign bribes can flow through Trump crypto
President Donald Trump's new bizarre crypto "memecoins" has led to widespread mockery online over his supporters losing money, as well as general disgust from some cryptocurrency backers who believe it's giving the entire space a bad name.
But there's something potentially more sinister going on here, columnist Catherine Rampell wrote for The Washington Post: a potential new way for foreign entities to buy influence in the Trump administration.
"The Trumps have been trying to get into crypto for a while, and they saw an opportunity to cash in this weekend," wrote Rampell. "Just as Trump sold his MAGA devotees Trump-branded Bibles and sneakers, he has now sold them a Trump memecoin. Of course, if someone pays $60 for a Trump-branded Bible, they may have overpaid, but at least they got a holy book in exchange; if you lose all your savings on Trump’s memecoin, you have nothing to show for it."
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Cryptocurrency, once hailed as a futuristic technology that would revolutionize the exchange of money, is becoming just another kind of investment product like stocks and bonds.
"Unlike stocks, however, memecoins have no cash flow, no fundamental value. There’s no claim to a business’s future profits, nor even the pretense of a business model. There’s no clear use case; no one is pretending $TRUMP will be used in real-world transactions to pay for groceries or a haircut, or to send remittances," wrote Rampell. "Rather, people buy memecoins such as $TRUMP solely because they think someone else might be willing to pay more for them someday. It’s basically a whizbang-sounding Ponzi scheme."
At least, that's how it's currently being used, she noted — but there is one more chilling possibility.
"This memecoin has now become the easiest, most convenient way to do that. The Saudis no longer need to stay at one of Trump’s hotels — or merely pretend to — to line the president’s pockets; they can flash their digital wallet to show how much they’ve boosted his net worth," wrote Rampell. "After all, every dollar they put into propping up the value of Trump’s memecoin will effectively add cash to Trump’s bank account, emoluments clause be damned."
Ultimately, wrote Rampell, when Trump stated in his inaugural address that “for many years, a radical and corrupt establishment has extracted power and wealth from our citizens,” it's possible "his objection was that the old establishment simply wasn’t tech-savvy enough."