Speaker 1: From Schwartz Media. I'm Ruby Jones. This is seven AM.
Speaker 1: Just three days ahead of his inauguration, US President Donald
Speaker 1: Trump announced his first venture into cryptocurrency, launching the trump Coin,
Speaker 1: and within hours of it going on sale, the price
Speaker 1: of the coin searched. Trump has been known to cash
Speaker 1: in on his popularity, selling an array of merchandise, including
Speaker 1: Trump branded sneakers, fragrances, and even trading cards, but this
Speaker 1: newest venture raises fresh ethical concerns about profiting from an
Speaker 1: industry with deep ties to the incoming administration and one
Speaker 1: that Trump himself has a hand in regulating. Today. Cryptocurrency
Speaker 1: and tech researcher Molly White on the billions Trump could
Speaker 1: potentially make off his mean coin and the ascendency of
Speaker 1: cryptocurrency in the Trump administration. It's Wednesday, January twenty one.
Speaker 2: That trump Coin this weekend caught many many's attention.
Speaker 3: It hit a fifteen.
Speaker 2: Billion market cap over the weekend, which puts it the
Speaker 2: top twenty coins out there in binding.
Speaker 1: So, Molly, if I had when it was first created
Speaker 1: invested in Donald Trump's cryptocurrency, how much money could I
Speaker 1: have made by this point?
Speaker 3: Well, I mean, it all depends on when you buy
Speaker 3: and when you sell, you know, in sort of a
Speaker 3: perfect world, you buy as low as possible and you
Speaker 3: sell as high as possible with the benefit of hindsight.
Speaker 3: And if you get in so early that it is
Speaker 3: almost impossible to buy the token that early, then you
Speaker 3: can make ten x one hundred extra turns on something
Speaker 3: like this. The majority of people were not getting in
Speaker 3: that early, and so most people were buying in at
Speaker 3: ten twenty dollars and it went up from there, and
Speaker 3: then it went down from there, and so some people
Speaker 3: have cashed out, some people are still holding I'm sure.
Speaker 1: Okay, well, let's back up a bit and talk a
Speaker 1: bit more about the coin itself. Can you tell me
Speaker 1: about what happened when it was launched and what Trump said?
Speaker 3: Yeah? So, Trump announced the meme coin on his social
Speaker 3: media accounts on Twitter, truth Social basically inviting people to
Speaker 3: celebrate his election win by purchasing a meme coin and
Speaker 3: basically said have fun and share the website and the
Speaker 3: token address for people to pile in.
Speaker 1: And when we talk about meme coins, can we unpack
Speaker 1: a bit what we're talking about here. So it's a
Speaker 1: currency or a token that's taken that's attached to a
Speaker 1: particular Internet trend. But tell me a bit more about
Speaker 1: how that works and as a result, how volatile something
Speaker 1: like that is.
Speaker 3: Yeah, so meme coins can be created about anything, and
Speaker 3: pretty much any time anything happens, someone creates a meme
Speaker 3: coin about it. But there is no business behind it.
Speaker 3: There is no product that you're buying. You are not
Speaker 3: really buying any sort of service. It is basically just
Speaker 3: speculating on other people buying that token because of some
Speaker 3: shared interest or marketing success. And they tend to be
Speaker 3: enormously volatile, partly because of the sort of fleeting attention
Speaker 3: span of people who are buying and selling these things,
Speaker 3: but also because there is a lot of manipulation in
Speaker 3: those markets and outright scams and frauds, and so it's
Speaker 3: actually very common for people to all buy a meme
Speaker 3: coin and then the creator of the token does what's
Speaker 3: called a rug pull, which is basically sells off massive
Speaker 3: quantities of the token, causing everyone else to basically lose
Speaker 3: all their money, but they take the profits. That happens
Speaker 3: multiple times a day in the meumcoin world.
Speaker 1: And this is obviously a cryptocurrency that anyone can buy
Speaker 1: and trade. But ultimately who is in charge of trump Coin.
Speaker 3: Well, it's Trump and the business entity that has launched
Speaker 3: this token called CIC and he's got Fight Fight Fight LLC.
Speaker 3: So there's sort of these like shell companies around it,
Speaker 3: but it's Trump and his team who are behind the token,
Speaker 3: and they control the terms of the token distribution, and
Speaker 3: they ultimately make some profits off of the token as well.
Speaker 1: Right, do we know how much profit Trump and his
Speaker 1: team are making.
Speaker 3: Well, it's a challenging thing to capture in the crypto world.
Speaker 3: People will they really like to say, oh, it's got
Speaker 3: you know, a ten billion dollar market cap, or it
Speaker 3: could go to fifty billion dollars once all the tokens
Speaker 3: are released. But that's a very naive way of calculating it.
Speaker 3: It's just taking the current token price and multiplying it
Speaker 3: by the total number of tokens, either in circulation currently
Speaker 3: or the total number that may ever exist, and assuming
Speaker 3: that there is that amount of liquidity in the market
Speaker 3: if Trump were to sell all of his holdings right
Speaker 3: this second. It's a very flawed way of estimating the
Speaker 3: price of the token. And I usually take a sort
Speaker 3: of conservative approach to it, where I only consider it
Speaker 3: money made if you've actually cashed out. It looks like
Speaker 3: Trump has cashed out maybe five hundred million dollars, far
Speaker 3: below the tens of billions of dollars that some headlines
Speaker 3: have been describing it as. There is really no feasible
Speaker 3: way that he could extract that much money from the
Speaker 3: token at this point in time.
Speaker 1: And I mean, they've said that they're going to keep
Speaker 1: making these tokens for the next three years. So is
Speaker 1: there potentially a lot more money to be made here.
Speaker 3: Potentially if the interest remains in the token, and that
Speaker 3: is the big if. The traditional trajectory of a meme
Speaker 3: cooin is that there is early interest and the price
Speaker 3: is high early on, and then it crashes and sort
Speaker 3: of peters out after that point. While there are some
Speaker 3: that have had some enduring success, you know, there's doge
Speaker 3: coin and shiba Enu and some of those early meme coins,
Speaker 3: they tend to have more of a project around them.
Speaker 3: This one is really just all vibes. But because Donald
Speaker 3: Trump has such a enthusiastic fan base, you know, it's
Speaker 3: really hard to predict what will happen with this token.
Speaker 1: After the break. Trump's political ties to cryptocurrency and how
Speaker 1: less regulation could barrel us into another financial crisis. Can
Speaker 1: we talk a bit about the ethics of an incoming
Speaker 1: president making money like this off the crypto market, because
Speaker 1: as president, he has a say in the regulation of
Speaker 1: financial markets, including crypto, doesn't he yes?
Speaker 3: And that was a very major topic during his presidential campaign.
Speaker 4: This afternoon, I'm laying out my plan to ensure that
Speaker 4: the United States will be the crypto capital of the
Speaker 4: planet and the bitcoin superpower of the world, and we'll
Speaker 4: get it done.
Speaker 3: He was very actively courting the cryptocurrency industry and promising
Speaker 3: that he would install regulators who loved the cryptocurrency industry
Speaker 3: and acts the regulators who had taken a more aggressive
Speaker 3: approach towards enforcing securities laws. For example, on.
Speaker 4: Day one, I will fire Gary Gensler and a point
Speaker 4: I knew sec Charnel.
Speaker 3: And so there is a huge conflict of interest there.
Speaker 3: I mean, I would argue there was a conflict of
Speaker 3: interest before he launched the meme cooin, given his previous
Speaker 3: crypto entanglements. But the more he directly financially benefits from
Speaker 3: these types of projects, the more he stands to gain
Speaker 3: from installing regulatory authorities that are either friendly towards crypto
Speaker 3: or basically just calling them off and causing crypto to
Speaker 3: be sort of a wild West, or to be regulated
Speaker 3: in a way that could be very profitable for him.
Speaker 2: You got to talk about president like Donald Trump has
Speaker 2: announced via truth Social that he plans to nominate Paul
Speaker 2: Atkins as the chair of the Securities and Exchange Commission
Speaker 2: in a crypto friendly move.
Speaker 3: It is feasible that Trump and people in his administration
Speaker 3: could cause the securities regulator to back off from crypto
Speaker 3: entirely because there is the possibility that Congress or even
Speaker 3: the Securities and Exchange Commission will decide that cryptocurrencies just
Speaker 3: aren't securities and therefore the sec has no remax over them,
Speaker 3: which I think is I mean, that's very much what
Speaker 3: the cryptocurrency industry would like to see, and so I
Speaker 3: would not be terribly surprised to see that outcome happen.
Speaker 3: Then it sort of remains to be seen. Okay, what
Speaker 3: are they if they're not securities? And who has the
Speaker 3: regulatory authority right?
Speaker 1: And that's sort of the debate that we're seeing play
Speaker 1: out at the moment. For instance, the website promoting the
Speaker 1: trump coin says that the tokens are not quote an
Speaker 1: investment opportunity, investment contract, or security of any type.
Speaker 3: So it's very common in the crypto world to do
Speaker 3: this type of maneuvering that we're seeing with the Trump
Speaker 3: coin here, where they make all of these disclaimers and
Speaker 3: statements about how it's a collectible, it's not a security,
Speaker 3: it's not an investment vehicle. Those types of disclaimers are
Speaker 3: somewhat legally dubious. There is no way to sort of
Speaker 3: disclaim yourself out of the securities regulations.
Speaker 1: And I mean the Trump coin. It's not out of
Speaker 1: character or unusual in the context of Trump, but it
Speaker 1: is in the context of American presidents. And I think
Speaker 1: it's a little hard to see what's going on is
Speaker 1: as anything other than I guess a way for Trump
Speaker 1: to make money, a bit of a grift.
Speaker 3: Right, And it's like you said, it's very in character
Speaker 3: for Trump. He has done NFTs, he has done bitcoin
Speaker 3: branded sneakers, bibles, I mean, anything that he can put
Speaker 3: his name on and sell to people. So this is
Speaker 3: very much of a kind with his other grifts basically,
Speaker 3: But like you said, it is enormously unusual for not
Speaker 3: just a president but really anyone in the political arena
Speaker 3: to do something of this kind. But you know, Trump
Speaker 3: has in many ways shown a willingness to flout not
Speaker 3: only the norms but the law.
Speaker 1: And in terms of the legalities of all of this,
Speaker 1: what are the conflict of interest law for US presidents
Speaker 1: in a scenario like this, is Trump actually breaking the law?
Speaker 3: Quite possibly? There are clauses in the Constitution saying that
Speaker 3: the president cannot accept money from foreign agents without approval
Speaker 3: from Congress. It's called the Emolument's clause. Trump has historically
Speaker 3: flouted those laws anyway, and there was not much action
Speaker 3: taken during his previous presidency where people from foreign countries
Speaker 3: were staying at his hotels, for example, and there were
Speaker 3: portions of his business interests that were basically avenues through
Speaker 3: which people could funnel money to Trump, and legal cases
Speaker 3: that were brought to do with those incidents were ultimately
Speaker 3: dropped because he left office, there was sort of no
Speaker 3: willingness out of the Supreme Court to enforce that against him.
Speaker 3: And given the changes in the Supreme Court since then
Speaker 3: and some decisions they've made to do with him, I
Speaker 3: would be very surprised if they took a strong stance
Speaker 3: against any further activities that he may take.
Speaker 1: And so when you look ahead for the next three years,
Speaker 1: I mean, how do you see this playing out in
Speaker 1: terms of the disruption of the financial system in this
Speaker 1: new intersection of political power in Trump's case, and cryptocurrency markets.
Speaker 3: I'm very concerned about the next couple of years and
Speaker 3: the likely breaking down of the firewalls between traditional finance
Speaker 3: and the banking industry, as well as the cryptocurrency industry.
Speaker 3: You know, for example, during the previous boom and bus
Speaker 3: cycle in the crypto world, we saw this massive collapse
Speaker 3: that was devastating to people who held cryptocurrency, but was
Speaker 3: almost unnoticeable to people who had no involvement in that world.
Speaker 3: And I very much worry that that could change the
Speaker 3: next time around if the crypto industry gets what it wants,
Speaker 3: which is to allow banks to get into crypto, allow
Speaker 3: more integration with the traditional financial world, such that if
Speaker 3: there is another collapse and crypto tends to go through
Speaker 3: these cycles of boom and bust, if that were to
Speaker 3: happen again, I would worry that we would see something
Speaker 3: almost like the two thousand and eight crisis, where it
Speaker 3: didn't really matter if you were involved in trading mortgage
Speaker 3: backed securities or if you even owned a home, you
Speaker 3: still saw the effects of that collapse in your financial portfolio.
Speaker 3: You might have lost your job. And I think there
Speaker 3: is definitely a possibility that something like that could happen
Speaker 3: if these types of firewalls break down. And the way
Speaker 3: we're seeing Trump signaling his plans for the industry, it
Speaker 3: seems like those regulations, such as they are, will only
Speaker 3: be reduced or enforced less than they have then, somewhat
Speaker 3: enshrining this lawlessness into the cryptocurrency world.
Speaker 1: Molly, thank you for your time, Thank you for having me.
Speaker 1: Also in the news today, pardons for January six, writers
Speaker 1: withdrawing from the Paris Agreement, leaving the World Health Organization,
Speaker 1: and renaming the Gulf of Mexico the Gulf of America.
Speaker 1: That's just four of the approximately two hundred executive orders
Speaker 1: signed by now President Trump on his first day in office.
Speaker 1: President Trump referred to the orders in his inaugration speech
Speaker 1: as a quote complete restoration of America. And psychiatrists in
Speaker 1: New South Wales have begun resigning on mass with at
Speaker 1: least one acute mental health ward already closing at Cumberland
Speaker 1: Hospital in Sydney's West. At least two hundred psychiatrists in
Speaker 1: the public system are set to resign after sixteen months
Speaker 1: of discussions with the state government failed to address pay
Speaker 1: disputes and critical staffing shortages. I'm Ruby Jones. This is
Speaker 1: seven am. See you tomorrow.