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A few days before President Trump's inauguration, partygoers in black tie were swaying back and forth to a Snoop Dogg set in the Mellon Auditorium in Washington, D.C. They were there for the crypto ball. And basically everybody who's anybody in the crypto industry was there. That's David Yaffe Bellany, who covers cryptocurrency for The New York Times. Mere mortals paid $2,500 for a ticket.

For $100,000, partygoers could get up close and personal with the big names. There was a special VIP part of the event where members of Donald Trump's family were rubbing shoulders with crypto executives. And everybody in the crypto industry was just toasting the start of what they hope will be a kind of new era of abundance. It was a moment the industry had been waiting for ever since it poured tens of millions of dollars into the election.

They were celebrating a series of promises that Trump had made to them on the campaign trail, that he would relax regulations on the crypto industry, that he would end a crackdown that the SEC had been pursuing against crypto companies for years, and that he even might go as far as to use federal funds to actually buy Bitcoin and build up a stockpile of Bitcoin for the U.S. government.

But while all these crypto power brokers were partying at the ball, the real action, David says, was on social media. First on Truth Social and then on Twitter, Trump announces that he's starting a new cryptocurrency. It's a meme coin. It's called Trump. And immediately, you know, all the day traders in their basements start stocking up on this thing while the powerful crypto executives are, you know, getting drunk and dancing to Snoop Dogg.

The thing about a meme coin is, to make money, you got to get in early. So the day traders at home, they start buying before the value of the coin shoots up. And all those people at the ball, away from their computers, were out of luck. Yeah, I mean, people were annoyed on a few different levels, but definitely one strand of frustration that emerged after all this happened was, damn, I could have made a lot of money, but I couldn't because you announced this thing while I was in a tuxedo at the crypto ball.

Do we know how much money it made for the president? So on paper, you know, the Trump team, you know, the Trump family, various business partners were sitting on a stash of these tokens that was worth tens of billions of dollars. Tens of billions with a B? Billions.

Billion with a B. But those are very theoretical paper gains. If the Trump family had sold off all those tokens at once, the price would have tanked and they wouldn't have been able to extract much value from that. But the paper holdings were worth tens of billions. And in addition to that...

Trump family, Trump business entities received fees every time the coins were traded. And those fees have ultimately amounted to about $100 million, maybe 10% of which has been kind of cashed out and converted into real money. At this point, how many different coins are associated with the Trump family?

It's a total of three at this point. So there is a cryptocurrency associated with the Trump crypto business, World Liberty Financial. That's a token called WLFI. Then there's the Trump meme coin that was launched the night of the crypto ball. That's dollar sign Trump. And then there's this Melania coin that was launched that weekend, a day or two before the inauguration itself, which is dollar sign Melania. So those are the three Trump tokens that are in circulation.

Today on the show, how Trump courted crypto and how it's paying off. Conflict of interest? Be damned. I'm Lizzie O'Leary, and you're listening to What Next TBD, a show about technology, power, and how the future will be determined. Stick around.

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You and I have talked before at length about the crypto industry's enthusiasm for President Trump. The ball that you're describing paints a very vivid picture of their excitement. How does this growing list of Trump coins land for the industry? What do they think?

I think initially there was a lot of enthusiasm. When the Trump coin first launches, you have people saying, this is amazing. It's the president of the United States kind of embracing our industry. This is going to be a moment where a lot of people who've never owned crypto before buy it for the first time. It's going to be this watershed for crypto and for its widespread adoption. But

the tune of the industry starts to change after the Melania coin is launched. And suddenly people are saying, wait, this is exploitative. You know, the Trump family is just trying to go after our money. You have people say things like, wait, isn't it a conflict of interest that the president of the United States who regulates crypto has his own coin? And it's like, suddenly the eyes of the industry are open to things that had been obvious to lots of other people for months.

And it was this sort of like remarkable moment where you saw a very kind of public, at least, you know, temporary, but very public break from Trump, which is not something that you've really seen at all since he won the election from any kind of corner of his support. How did they feel about him now?

I think a lot of that anger has cooled off. There's maybe still some skepticism. People are still kind of resentful about how this meme coin launched. They feel like they lost money and it was unfair. But Trump has proceeded to do a lot of things that benefit the industry. He issued an executive order about crypto in his first week in office, which didn't do a lot concretely, but it sort of laid the stage for a lot of the things that the crypto industry is going to want going forward.

He pardoned Ross Ulbricht, who was the founder of the Silk Road crypto-fueled drug marketplace and who's a big cult hero in the crypto world. So that was something the industry was excited about. He's kind of continued to talk about the possibility of launching a Bitcoin strategic reserve, a government stockpile of Bitcoin, which was another campaign promise there.

And he's also continued to make personnel selections that benefit the industry, the most recent of which is that he chose a crypto insider to lead the Commodity Futures Trading Commission, which is one of the agencies that regulates crypto. So overall, the industry is happy, but there's still some lingering anger, dissatisfaction about how this meme coin thing went.

I want to unpack meme coins a little bit for people to whom this all sounds like gibberish or insanity. What makes a meme coin appealing? Why do people want to buy them? Yeah, that's a great question. So first, it's worth exploring how meme coins are different from other types of cryptocurrencies. A

A lot of people feel that the industry hasn't done a good job showing that crypto has practical utility. But some of these currencies are at least designed to have some sort of utility. You know, they're supposed to make... Because they're pegged to the dollar? They're pegged to the dollar or they're meant to make payments easier. They're meant to facilitate remittances overseas. Or you're supposed to be able to do some fancy automated borrowing and lending with them. Meme coins don't even pretend to have any use.

They are simply a way to gamble. And you're basically betting that the vibe of a certain meme will ensure that the price of the meme coin goes up for a while and that you can make some money. And every dollar that you make is a dollar that somebody else in the market loses.

And they're popular because internet memes are popular and because people latch onto them and they think this is a way to make a quick buck and they don't understand the risks and they suddenly lose a lot of money. And there's a whole kind of cottage industry of crypto types who surround celebrities and politicians and try to get them to launch these meme coins. And it creates this kind of enthusiastic base for buying them in the crypto world.

Yeah, I want to try to understand, like, why a meme coin is so appealing as a way to make money right now. Is it because it's just so easy? Is it because, lol, nothing matters? Like, I'm trying to understand this inflection point because it seems to say something about the moment we're living in.

Yeah, I mean, it really does. And look, there's nothing more American than a get-rich-quick scheme. And that's partly what a meme coin looks like to people. And it is true. If you time your trades correctly, you can get rich quick. It's just very difficult to do that as an amateur sitting at home competing against professional investors who are running complicated trading bots.

Why is it popular now? I mean, we're a more online society than we ever before. And meme coins kind of latch on to these online symbols, jokes, characters, and try to kind of convert that sort of ephemeral internet excitement into a financial product. And it's bizarre, it's surreal, but that's the world that we live in these days. How is this different from a pump and dump?

Well, it's not that different. And a lot of these meme coin launches do resemble pump and dump schemes. Sometimes you have the creators of the coin literally buy huge amounts very early on, watch as the price goes up, and then sell those holdings immediately. That's kind of a classic pump and dump where the insiders themselves are benefiting. But you also have market patterns that kind of have a similar effect. Maybe it's not an insider who scooped up a lot of the coins, but

It's a professional crypto trader who is kind of crawling social media, trying to find new meme coins associated with celebrities, and then they'll have a trading bot scoop up a bunch of those coins right away and sell them very quickly. That's a phenomenon known as sniping in the crypto world. And it's something that professional traders pride themselves on doing, and they can make a lot of money, but at whose expense? It's at the expense of your average internet user day trader type who's like, oh, huh, I kind of want to own the Trump coin.

Yeah, I mean, in many ways, this feels not dissimilar to how people interacted with meme stocks, you know, with GameStop, AMC, whatever it is. Like, do day traders, do individuals get hosed?

Absolutely. Yeah, I mean, if you trace the history of this, the kind of GameStop euphoria during the pandemic is kind of an important moment in this that sort of paved the way for meme coins becoming popular. But at least at that point, you had a sort of like ideological, you know, wave that sort of took form. And, you know, buying that stock was about restoring power to the people and kind of sticking it to the big hedge funds and that sort of thing. And,

you know, it's evolved to the point where like this is really just vibes and memes and people trying to make a Quick buck.

meme coins are incredibly easy to create. There are sites that allow you to do it in a couple of minutes for just a couple of dollars. And so, you know, there are thousands and thousands of meme coins being created all the time. Everyone's trying to get theirs to take off so they can make some money quickly. And, you know, inevitably people end up losing money in that process. I mean, I just feel like the thing that this comes back to a lot is I'm like, but it's not worth anything. It's just pretend. Yeah, I mean, it...

It's pretend and nobody's acting as if it's anything other than that. I mean, you have a lot of cryptocurrencies that have big supporters who make really impassioned arguments about why it's useful or why it's going to be useful and why it's the wave of the future. Nobody is saying that about meme coins.

The people who create meme coins speak about them in remarkably cynical terms. This is all garbage, but you'll make some money. It'll be fun. And when you talk to quote-unquote serious people in the crypto industry who are behind some of these currencies that do have practical utilities, and you ask them about meme coins, you get a mix of responses. Some people will say, yeah, this is garbage, and it's giving our industry a bad name, and I wish people would stop.

Other people would say, oh, yo, but you never know. You never know what's the thing that's going to lead to global adoption of crypto. Maybe it's a meme coin modeled on a picture of a cute dog. That's the thing that's going to inspire some 25-year-old in Ohio to start investing in crypto. And it's kind of like the gateway drug to this whole world. Who are those people who lost money? Do we know?

It's hard to say because on the kind of crypto blockchain, this public ledger of crypto transactions, you can see the accounts that are making or losing money and they're identified by strands of letters and numbers. And you can track them in a way that's kind of very fascinating, which you couldn't do in traditional finance. But you can't actually, you know, unpeel that

you know, series of letters and numbers and find out the identity behind an account. In some cases, you know, people will publicly announce on social media, hey, that was me, but it's hard to tell who exactly these people are. But like I mentioned earlier, you know, some data analytics firms have looked at the trading activity around the Trump coin, found that a lot of these wallets were newly created, which suggests some first-time traders, amateur traders,

And just in our own kind of reporting interviews and sort of surfing of social media, I mean, you can see people who are kind of regular old supporters of Donald Trump, you know, talking about losing money and the sort of disappointment associated with that. After the break, what about, you know, regulation?

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The PC gave us computing power at home, the internet connected us, and mobile let us do it pretty much anywhere. Now generative AI lets us communicate with technology in our own language, using our own senses. But figuring it all out when you're living through it is a totally different story. Welcome to Leading the Shift.

a new podcast for Microsoft Azure. I'm your host, Susan Etlinger. In each episode, leaders will share what they're learning to help you navigate all this change with confidence. Please join us. Listen and subscribe wherever you get your podcasts. The United States has always been pretty clear on one thing. No kings. No kings.

But the new Trump regime has spent the first month of his second presidency acting like maybe that doesn't apply to him. Only the president or the attorney general can speak for the United States when stating an opinion as to what the law is. I'm Dahlia Lithwick, host of Amicus, Slate's podcast about the courts, the law and the Supreme Court.

The new administration is fighting lawsuits on so many fronts. Many of those lawsuits question the unbridled power Trump is trying to claim under the banner of an extreme version of something called the unitary executive theory. There's no question that the court is going to have to weigh in on how far the unitary executive theory goes.

As all roads point to SCOTUS, will the courts hold the line? Listen to our recent episode, Long Live the King, on Amicus, wherever you get your podcasts. So on the campaign trail, obviously, President Trump courted the crypto vote. He would demonize Gary Gensler, the Biden SEC chair. Now, Paul Atkins is the SEC chair, more pro-crypto. But I mean, is

Is Atkins and are the CFTC just going to pretend that it's normal to have the president and his family members making meme coins?

I mean, that's an open question. I mean, you know, Paul Atkins hasn't been confirmed yet, so we don't know exactly what he's going to do. But if you look at the pattern that's playing out in the Justice Department right now, I mean, it seems like these political appointees of Trump are basically willing to do what he wants them to do without asking too many questions. And so I would be pretty surprised if you saw the SEC or the CFTC embark on some sort of serious investigation of, you know,

pump and dump patterns in the launch of the Trump meme coin. It's just sort of hard to imagine, you know, that's not how Trump operates. And, you know, you could see him firing people who cross him in that kind of way. So I would be pretty surprised if we saw any real regulatory scrutiny of the conflicts of interest associated with these crypto launches. On Friday, the crypto exchange Coinbase said that the SEC agreed to drop a lawsuit against the company.

The government had sued Coinbase two years ago, alleging that the digital currencies sold on its platform were unregistered securities that put consumers at risk. At the same time, you reported last week that the Senate Finance Committee was investigating a crypto investor for maybe violating tax laws. And like, how do we square that with whatever is going on in Trump coin and Melania coin?

Well, I mean, it's worth noting that that investigation you're referring to

intensified before the inauguration, and it's not entirely clear where it's going to go from here. You know, the senator who is behind it is a Democrat, and, you know, I think it's an open question whether it will kind of proceed in a serious way. And, you know, you might see efforts on the Hill by Democrats to kind of, like, pursue some of these guys, look into some of these questions, but because they're in the minority, there's a limit to what they can accomplish. And,

And I think you can definitely expect the regulatory agencies to stop looking into this stuff with much serious effort. What is the crypto endgame here for Trump? Like, do you think he actually cares about making crypto more legitimate? One of the things he promised on the campaign trail? Or is this just like strike while the iron is hot and make some money?

The most cynical reading of what Trump is doing was that he was courting campaign donations, and it's very easy for him to follow through on the promises that he made to get those donations, and so now he's doing it. He has a long history as a businessman of these sorts of, you know, make-a-quick-buck type ventures, so it does sort of like fit with some of his history. But

But, you know, there are certain like ideological strands to the crypto world that kind of align with Trumpism in a way that feels relatively natural. One of his sons, Eric Trump, has talked about the experience of losing a bank account and feeling as if

the banks are engaging in some sort of political retribution or discrimination against the Trump family. And crypto offers a theoretical alternative to that. So, you know, you could also make an argument about why the kind of success of crypto could sort of align with some Trumpian goals. Yeah, and it seems to align with many of the goals of the sort of Silicon Valley libertarian ethos,

people who are now a part of the administration. Exactly, and who are deciding who should be hired and fired across the federal government. Okay, let's take a quick trip outside of the United States. On Valentine's Day, the Argentinian president, Javier Millet, got involved in his own meme coin situation. He tweeted in support of a coin called Libra. Then it plummeted, and now he is facing calls for an impeachment. Like,

Is that a cautionary tale for Trump? Or is that just like, well, that's something that happened in Argentina? I mean, this is really a wild story. I mean, you have the president of Argentina endorsing a meme coin and now he's embroiled in like the biggest political crisis in the country, you know, over a stupid meme coin. It's sort of a...

I mean, even by crypto standards, it is a wild and surreal turn of events. Is it a cautionary tale for Trump? I mean, he's already done it. He launched his meme coin first and, you know, he didn't face these kinds of repercussions. And, you know, there's a sense of impunity around a lot of what Trump does now. I think he feels as if he has this mandate and he can sort of do what he wants. And it is sort of hard to imagine that...

that a meme coin gone awry could derail the Trump presidency. I mean, lots of people lost money on this. My colleague and I did a story a few days ago about the amount of money that people have lost on the Trump meme coin. If you compare the kind of number of accounts that lost money to the number that made money, way more people lost money. And the data that we have almost certainly underestimates the degree of the losses. But that hasn't had any sort of serious political repercussion for Trump.

Is crypto ever going to shake off the scammy part of its reputation? Or is that irrelevant now?

It's hard to predict the future, but I can say that after the crypto industry collapsed in 2022 and a lot of scammers went to prison, you had many of the people left behind saying, what we've done is we've eliminated the kind of layer of con men that we've had to live with. And we're charting a new path forward and we're going to create a cleaner, better crypto industry.

Here we are two years after that, and we've got people getting fleeced on meme coins marketed by fly-by-night crypto entrepreneurs who somehow have access to the president of Argentina. So it doesn't really feel as if we have a new, cleaner crypto industry. At the same time, there's an immense political opportunity for crypto with the amount of support that it has in Congress, with the support that it has in the White House, and it's

The question will be, can the industry seize this opportunity and prove its legitimacy or will it sort of fritter away this moment because it's, you know, too many people are getting scammed by meme points. David Yaffe-Bellany, it is, as always, illuminating to talk to you. Thanks so much for having me.

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We will be back next week with more episodes. I'm Lizzie O'Leary. Thanks for listening. Get that Angel Reef special at McDonald's now. Let's break it down. My favorite barbecue sauce, American cheese, crispy bacon, pickles, onions, and a sesame seed bun, of course. And don't forget the fries and a drink. Sound good? Ba-da-ba-ba-ba. I'm Leon Nafok, and I'm the host of Slow Burn Watergate. Before I started working on this show...

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