WEBVTT - Trump’s plan to make billions off cryptocurrency 0:00:01.280 --> 0:00:10.840 From Schwartz Media. I'm Ruby Jones. This is seven AM. 0:00:10.880 --> 0:00:14.240 Just three days ahead of his inauguration, US President Donald 0:00:14.280 --> 0:00:19.280 Trump announced his first venture into cryptocurrency, launching the trump Coin, 0:00:19.960 --> 0:00:22.479 and within hours of it going on sale, the price 0:00:22.520 --> 0:00:26.280 of the coin searched. Trump has been known to cash 0:00:26.280 --> 0:00:29.680 in on his popularity, selling an array of merchandise, including 0:00:29.840 --> 0:00:34.760 Trump branded sneakers, fragrances, and even trading cards, but this 0:00:34.840 --> 0:00:38.919 newest venture raises fresh ethical concerns about profiting from an 0:00:38.920 --> 0:00:42.760 industry with deep ties to the incoming administration and one 0:00:42.800 --> 0:00:47.440 that Trump himself has a hand in regulating. Today. Cryptocurrency 0:00:47.479 --> 0:00:50.880 and tech researcher Molly White on the billions Trump could 0:00:50.920 --> 0:00:54.120 potentially make off his mean coin and the ascendency of 0:00:54.160 --> 0:01:05.240 cryptocurrency in the Trump administration. It's Wednesday, January twenty one. 0:01:09.319 --> 0:01:13.160 That trump Coin this weekend caught many many's attention. 0:01:13.319 --> 0:01:14.720 It hit a fifteen. 0:01:14.360 --> 0:01:17.480 Billion market cap over the weekend, which puts it the 0:01:17.520 --> 0:01:19.960 top twenty coins out there in binding. 0:01:20.240 --> 0:01:25.479 So, Molly, if I had when it was first created 0:01:25.760 --> 0:01:30.399 invested in Donald Trump's cryptocurrency, how much money could I 0:01:30.440 --> 0:01:31.920 have made by this point? 0:01:33.040 --> 0:01:35.240 Well, I mean, it all depends on when you buy 0:01:35.319 --> 0:01:37.000 and when you sell, you know, in sort of a 0:01:37.000 --> 0:01:39.560 perfect world, you buy as low as possible and you 0:01:39.640 --> 0:01:42.400 sell as high as possible with the benefit of hindsight. 0:01:43.120 --> 0:01:46.200 And if you get in so early that it is 0:01:46.319 --> 0:01:49.600 almost impossible to buy the token that early, then you 0:01:49.680 --> 0:01:52.559 can make ten x one hundred extra turns on something 0:01:52.640 --> 0:01:55.440 like this. The majority of people were not getting in 0:01:55.480 --> 0:01:58.760 that early, and so most people were buying in at 0:01:58.960 --> 0:02:02.200 ten twenty dollars and it went up from there, and 0:02:02.240 --> 0:02:04.840 then it went down from there, and so some people 0:02:04.880 --> 0:02:07.480 have cashed out, some people are still holding I'm sure. 0:02:08.000 --> 0:02:09.520 Okay, well, let's back up a bit and talk a 0:02:09.520 --> 0:02:12.200 bit more about the coin itself. Can you tell me 0:02:12.280 --> 0:02:15.560 about what happened when it was launched and what Trump said? 0:02:16.240 --> 0:02:20.840 Yeah? So, Trump announced the meme coin on his social 0:02:20.880 --> 0:02:26.120 media accounts on Twitter, truth Social basically inviting people to 0:02:26.360 --> 0:02:31.280 celebrate his election win by purchasing a meme coin and 0:02:31.520 --> 0:02:36.880 basically said have fun and share the website and the 0:02:36.919 --> 0:02:39.000 token address for people to pile in. 0:02:40.160 --> 0:02:44.040 And when we talk about meme coins, can we unpack 0:02:44.080 --> 0:02:46.320 a bit what we're talking about here. So it's a 0:02:46.360 --> 0:02:50.080 currency or a token that's taken that's attached to a 0:02:50.120 --> 0:02:53.760 particular Internet trend. But tell me a bit more about 0:02:53.760 --> 0:02:56.800 how that works and as a result, how volatile something 0:02:56.880 --> 0:02:57.360 like that is. 0:02:57.880 --> 0:03:01.280 Yeah, so meme coins can be created about anything, and 0:03:01.520 --> 0:03:04.880 pretty much any time anything happens, someone creates a meme 0:03:04.919 --> 0:03:09.639 coin about it. But there is no business behind it. 0:03:09.720 --> 0:03:13.000 There is no product that you're buying. You are not 0:03:13.160 --> 0:03:16.960 really buying any sort of service. It is basically just 0:03:17.080 --> 0:03:22.120 speculating on other people buying that token because of some 0:03:22.720 --> 0:03:27.960 shared interest or marketing success. And they tend to be 0:03:28.440 --> 0:03:32.880 enormously volatile, partly because of the sort of fleeting attention 0:03:33.040 --> 0:03:36.480 span of people who are buying and selling these things, 0:03:36.520 --> 0:03:39.440 but also because there is a lot of manipulation in 0:03:39.480 --> 0:03:43.560 those markets and outright scams and frauds, and so it's 0:03:43.560 --> 0:03:46.880 actually very common for people to all buy a meme 0:03:46.960 --> 0:03:50.000 coin and then the creator of the token does what's 0:03:50.000 --> 0:03:54.680 called a rug pull, which is basically sells off massive 0:03:54.800 --> 0:03:58.440 quantities of the token, causing everyone else to basically lose 0:03:58.480 --> 0:04:01.280 all their money, but they take the profits. That happens 0:04:01.520 --> 0:04:03.760 multiple times a day in the meumcoin world. 0:04:05.440 --> 0:04:09.360 And this is obviously a cryptocurrency that anyone can buy 0:04:09.560 --> 0:04:13.760 and trade. But ultimately who is in charge of trump Coin. 0:04:14.720 --> 0:04:19.359 Well, it's Trump and the business entity that has launched 0:04:19.400 --> 0:04:24.320 this token called CIC and he's got Fight Fight Fight LLC. 0:04:24.839 --> 0:04:27.440 So there's sort of these like shell companies around it, 0:04:27.520 --> 0:04:31.000 but it's Trump and his team who are behind the token, 0:04:31.120 --> 0:04:36.119 and they control the terms of the token distribution, and 0:04:36.520 --> 0:04:40.600 they ultimately make some profits off of the token as well. 0:04:40.680 --> 0:04:43.280 Right, do we know how much profit Trump and his 0:04:43.440 --> 0:04:44.159 team are making. 0:04:44.920 --> 0:04:47.960 Well, it's a challenging thing to capture in the crypto world. 0:04:48.480 --> 0:04:51.159 People will they really like to say, oh, it's got 0:04:51.240 --> 0:04:54.080 you know, a ten billion dollar market cap, or it 0:04:54.120 --> 0:04:56.720 could go to fifty billion dollars once all the tokens 0:04:56.720 --> 0:05:00.320 are released. But that's a very naive way of calculating it. 0:05:00.080 --> 0:05:03.760 It's just taking the current token price and multiplying it 0:05:03.800 --> 0:05:07.640 by the total number of tokens, either in circulation currently 0:05:07.960 --> 0:05:12.080 or the total number that may ever exist, and assuming 0:05:12.360 --> 0:05:15.760 that there is that amount of liquidity in the market 0:05:15.920 --> 0:05:19.440 if Trump were to sell all of his holdings right 0:05:19.480 --> 0:05:23.840 this second. It's a very flawed way of estimating the 0:05:23.880 --> 0:05:27.200 price of the token. And I usually take a sort 0:05:27.240 --> 0:05:30.520 of conservative approach to it, where I only consider it 0:05:30.680 --> 0:05:34.240 money made if you've actually cashed out. It looks like 0:05:34.360 --> 0:05:39.440 Trump has cashed out maybe five hundred million dollars, far 0:05:39.480 --> 0:05:43.120 below the tens of billions of dollars that some headlines 0:05:43.160 --> 0:05:48.120 have been describing it as. There is really no feasible 0:05:48.200 --> 0:05:50.440 way that he could extract that much money from the 0:05:50.440 --> 0:05:51.960 token at this point in time. 0:05:53.400 --> 0:05:55.200 And I mean, they've said that they're going to keep 0:05:55.240 --> 0:05:58.000 making these tokens for the next three years. So is 0:05:58.000 --> 0:06:01.640 there potentially a lot more money to be made here. 0:06:02.240 --> 0:06:06.359 Potentially if the interest remains in the token, and that 0:06:06.520 --> 0:06:09.480 is the big if. The traditional trajectory of a meme 0:06:09.600 --> 0:06:12.320 cooin is that there is early interest and the price 0:06:12.480 --> 0:06:15.840 is high early on, and then it crashes and sort 0:06:15.839 --> 0:06:20.400 of peters out after that point. While there are some 0:06:20.480 --> 0:06:24.400 that have had some enduring success, you know, there's doge 0:06:24.440 --> 0:06:28.520 coin and shiba Enu and some of those early meme coins, 0:06:29.200 --> 0:06:32.360 they tend to have more of a project around them. 0:06:32.520 --> 0:06:38.599 This one is really just all vibes. But because Donald 0:06:38.640 --> 0:06:43.080 Trump has such a enthusiastic fan base, you know, it's 0:06:43.120 --> 0:06:45.880 really hard to predict what will happen with this token. 0:06:47.040 --> 0:06:50.880 After the break. Trump's political ties to cryptocurrency and how 0:06:50.960 --> 0:07:00.120 less regulation could barrel us into another financial crisis. Can 0:07:00.160 --> 0:07:02.920 we talk a bit about the ethics of an incoming 0:07:02.960 --> 0:07:06.479 president making money like this off the crypto market, because 0:07:06.880 --> 0:07:10.280 as president, he has a say in the regulation of 0:07:10.400 --> 0:07:13.880 financial markets, including crypto, doesn't he yes? 0:07:14.200 --> 0:07:19.240 And that was a very major topic during his presidential campaign. 0:07:19.520 --> 0:07:22.680 This afternoon, I'm laying out my plan to ensure that 0:07:22.720 --> 0:07:26.160 the United States will be the crypto capital of the 0:07:26.200 --> 0:07:29.720 planet and the bitcoin superpower of the world, and we'll 0:07:29.760 --> 0:07:30.720 get it done. 0:07:31.200 --> 0:07:35.760 He was very actively courting the cryptocurrency industry and promising 0:07:36.120 --> 0:07:40.320 that he would install regulators who loved the cryptocurrency industry 0:07:41.000 --> 0:07:45.600 and acts the regulators who had taken a more aggressive 0:07:45.640 --> 0:07:49.160 approach towards enforcing securities laws. For example, on. 0:07:49.280 --> 0:07:52.800 Day one, I will fire Gary Gensler and a point 0:07:52.840 --> 0:07:55.400 I knew sec Charnel. 0:07:56.200 --> 0:07:58.360 And so there is a huge conflict of interest there. 0:07:58.400 --> 0:07:59.760 I mean, I would argue there was a conflict of 0:07:59.760 --> 0:08:02.760 interest before he launched the meme cooin, given his previous 0:08:02.760 --> 0:08:08.120 crypto entanglements. But the more he directly financially benefits from 0:08:08.160 --> 0:08:11.600 these types of projects, the more he stands to gain 0:08:11.840 --> 0:08:18.080 from installing regulatory authorities that are either friendly towards crypto 0:08:18.240 --> 0:08:21.600 or basically just calling them off and causing crypto to 0:08:21.640 --> 0:08:24.520 be sort of a wild West, or to be regulated 0:08:24.560 --> 0:08:26.400 in a way that could be very profitable for him. 0:08:26.440 --> 0:08:28.600 You got to talk about president like Donald Trump has 0:08:28.600 --> 0:08:31.600 announced via truth Social that he plans to nominate Paul 0:08:31.840 --> 0:08:35.280 Atkins as the chair of the Securities and Exchange Commission 0:08:35.360 --> 0:08:36.680 in a crypto friendly move. 0:08:37.200 --> 0:08:41.800 It is feasible that Trump and people in his administration 0:08:42.000 --> 0:08:45.560 could cause the securities regulator to back off from crypto 0:08:45.760 --> 0:08:51.480 entirely because there is the possibility that Congress or even 0:08:51.520 --> 0:08:55.400 the Securities and Exchange Commission will decide that cryptocurrencies just 0:08:55.440 --> 0:09:00.840 aren't securities and therefore the sec has no remax over them, 0:09:01.240 --> 0:09:03.240 which I think is I mean, that's very much what 0:09:03.240 --> 0:09:06.040 the cryptocurrency industry would like to see, and so I 0:09:06.040 --> 0:09:09.280 would not be terribly surprised to see that outcome happen. 0:09:10.000 --> 0:09:13.000 Then it sort of remains to be seen. Okay, what 0:09:13.080 --> 0:09:15.720 are they if they're not securities? And who has the 0:09:15.760 --> 0:09:17.719 regulatory authority right? 0:09:17.760 --> 0:09:19.520 And that's sort of the debate that we're seeing play 0:09:19.520 --> 0:09:22.960 out at the moment. For instance, the website promoting the 0:09:23.000 --> 0:09:26.679 trump coin says that the tokens are not quote an 0:09:26.679 --> 0:09:31.079 investment opportunity, investment contract, or security of any type. 0:09:31.720 --> 0:09:34.240 So it's very common in the crypto world to do 0:09:34.559 --> 0:09:38.240 this type of maneuvering that we're seeing with the Trump 0:09:38.320 --> 0:09:41.440 coin here, where they make all of these disclaimers and 0:09:41.480 --> 0:09:44.559 statements about how it's a collectible, it's not a security, 0:09:44.679 --> 0:09:48.760 it's not an investment vehicle. Those types of disclaimers are 0:09:48.800 --> 0:09:52.160 somewhat legally dubious. There is no way to sort of 0:09:52.240 --> 0:09:55.559 disclaim yourself out of the securities regulations. 0:09:56.440 --> 0:09:59.160 And I mean the Trump coin. It's not out of 0:09:59.280 --> 0:10:03.000 character or unusual in the context of Trump, but it 0:10:03.120 --> 0:10:07.040 is in the context of American presidents. And I think 0:10:07.080 --> 0:10:09.240 it's a little hard to see what's going on is 0:10:10.160 --> 0:10:13.240 as anything other than I guess a way for Trump 0:10:13.280 --> 0:10:15.720 to make money, a bit of a grift. 0:10:16.360 --> 0:10:18.960 Right, And it's like you said, it's very in character 0:10:19.080 --> 0:10:22.679 for Trump. He has done NFTs, he has done bitcoin 0:10:22.800 --> 0:10:26.520 branded sneakers, bibles, I mean, anything that he can put 0:10:26.559 --> 0:10:29.720 his name on and sell to people. So this is 0:10:30.000 --> 0:10:34.679 very much of a kind with his other grifts basically, 0:10:34.800 --> 0:10:39.160 But like you said, it is enormously unusual for not 0:10:39.320 --> 0:10:43.280 just a president but really anyone in the political arena 0:10:43.400 --> 0:10:46.600 to do something of this kind. But you know, Trump 0:10:46.640 --> 0:10:50.440 has in many ways shown a willingness to flout not 0:10:50.520 --> 0:10:53.160 only the norms but the law. 0:10:54.280 --> 0:10:57.400 And in terms of the legalities of all of this, 0:10:57.679 --> 0:11:01.480 what are the conflict of interest law for US presidents 0:11:01.559 --> 0:11:06.160 in a scenario like this, is Trump actually breaking the law? 0:11:06.640 --> 0:11:10.480 Quite possibly? There are clauses in the Constitution saying that 0:11:10.520 --> 0:11:16.000 the president cannot accept money from foreign agents without approval 0:11:16.200 --> 0:11:20.720 from Congress. It's called the Emolument's clause. Trump has historically 0:11:21.320 --> 0:11:26.199 flouted those laws anyway, and there was not much action 0:11:26.360 --> 0:11:31.280 taken during his previous presidency where people from foreign countries 0:11:31.280 --> 0:11:35.160 were staying at his hotels, for example, and there were 0:11:35.440 --> 0:11:39.760 portions of his business interests that were basically avenues through 0:11:39.800 --> 0:11:44.079 which people could funnel money to Trump, and legal cases 0:11:44.080 --> 0:11:48.000 that were brought to do with those incidents were ultimately 0:11:48.080 --> 0:11:51.680 dropped because he left office, there was sort of no 0:11:51.800 --> 0:11:55.200 willingness out of the Supreme Court to enforce that against him. 0:11:55.880 --> 0:11:59.559 And given the changes in the Supreme Court since then 0:11:59.559 --> 0:12:02.040 and some decisions they've made to do with him, I 0:12:02.080 --> 0:12:04.960 would be very surprised if they took a strong stance 0:12:05.480 --> 0:12:08.000 against any further activities that he may take. 0:12:09.040 --> 0:12:11.280 And so when you look ahead for the next three years, 0:12:11.360 --> 0:12:13.200 I mean, how do you see this playing out in 0:12:13.320 --> 0:12:16.880 terms of the disruption of the financial system in this 0:12:17.000 --> 0:12:21.880 new intersection of political power in Trump's case, and cryptocurrency markets. 0:12:22.840 --> 0:12:26.720 I'm very concerned about the next couple of years and 0:12:27.240 --> 0:12:33.280 the likely breaking down of the firewalls between traditional finance 0:12:33.640 --> 0:12:37.800 and the banking industry, as well as the cryptocurrency industry. 0:12:38.440 --> 0:12:41.640 You know, for example, during the previous boom and bus 0:12:41.679 --> 0:12:46.079 cycle in the crypto world, we saw this massive collapse 0:12:46.160 --> 0:12:50.480 that was devastating to people who held cryptocurrency, but was 0:12:50.640 --> 0:12:55.720 almost unnoticeable to people who had no involvement in that world. 0:12:56.360 --> 0:12:59.000 And I very much worry that that could change the 0:12:59.040 --> 0:13:02.200 next time around if the crypto industry gets what it wants, 0:13:02.280 --> 0:13:07.199 which is to allow banks to get into crypto, allow 0:13:07.760 --> 0:13:12.320 more integration with the traditional financial world, such that if 0:13:12.320 --> 0:13:15.680 there is another collapse and crypto tends to go through 0:13:15.720 --> 0:13:19.400 these cycles of boom and bust, if that were to 0:13:19.480 --> 0:13:22.320 happen again, I would worry that we would see something 0:13:22.360 --> 0:13:25.480 almost like the two thousand and eight crisis, where it 0:13:25.480 --> 0:13:29.920 didn't really matter if you were involved in trading mortgage 0:13:30.280 --> 0:13:34.320 backed securities or if you even owned a home, you 0:13:34.440 --> 0:13:39.640 still saw the effects of that collapse in your financial portfolio. 0:13:39.760 --> 0:13:42.920 You might have lost your job. And I think there 0:13:42.960 --> 0:13:45.960 is definitely a possibility that something like that could happen 0:13:46.480 --> 0:13:51.520 if these types of firewalls break down. And the way 0:13:51.600 --> 0:13:56.360 we're seeing Trump signaling his plans for the industry, it 0:13:56.400 --> 0:14:00.320 seems like those regulations, such as they are, will only 0:14:00.360 --> 0:14:04.960 be reduced or enforced less than they have then, somewhat 0:14:05.080 --> 0:14:09.120 enshrining this lawlessness into the cryptocurrency world. 0:14:11.679 --> 0:14:15.000 Molly, thank you for your time, Thank you for having me. 0:14:22.000 --> 0:14:25.320 Also in the news today, pardons for January six, writers 0:14:25.360 --> 0:14:28.920 withdrawing from the Paris Agreement, leaving the World Health Organization, 0:14:29.120 --> 0:14:32.480 and renaming the Gulf of Mexico the Gulf of America. 0:14:32.800 --> 0:14:36.400 That's just four of the approximately two hundred executive orders 0:14:36.400 --> 0:14:40.200 signed by now President Trump on his first day in office. 0:14:40.240 --> 0:14:43.360 President Trump referred to the orders in his inaugration speech 0:14:43.440 --> 0:14:49.600 as a quote complete restoration of America. And psychiatrists in 0:14:49.640 --> 0:14:51.920 New South Wales have begun resigning on mass with at 0:14:52.000 --> 0:14:55.880 least one acute mental health ward already closing at Cumberland 0:14:55.960 --> 0:15:00.280 Hospital in Sydney's West. At least two hundred psychiatrists in 0:15:00.320 --> 0:15:03.440 the public system are set to resign after sixteen months 0:15:03.480 --> 0:15:06.440 of discussions with the state government failed to address pay 0:15:06.480 --> 0:15:10.680 disputes and critical staffing shortages. I'm Ruby Jones. This is 0:15:10.720 --> 0:15:25.360 seven am. See you tomorrow.