Trump's growing cryptocurrency and media empire creates potential trade conflicts

Not long after purchasing a $6.2 million banana and publicly consuming it as part of a tech stunt, Chinese cryptocurrency entrepreneur Justin Sun made another eye-catching purchase, investing $30 million ($23.5 million) in a cryptocurrency company called World Liberty Financial.

The company has stumbled since its launch in October, and investors appear wary of its prospects and terms.

But it did boast a potentially enticing advantage: the opportunity to do business with and promote a strong partnership with Donald Trump.

Sun's investment took the company beyond the threshold that allowed the president-elect to begin profiting from the project. Now Trump and his family are in a position to raise nearly $20 million – and perhaps much more.

Sun, who is currently fighting fraud charges in the United States in connection with his cryptocurrency business, did not respond to questions about what led him to become interested in tokens, which cannot be traded.

But the incident set off alarm bells among government ethics experts, who saw it as an indication that Trump's expanding business ventures have made it easier than ever for those hoping to influence US policy to funnel money his way.

“The conflicts have grown exponentially with the scope of his business empire,” said Richard Painter, who served as the White House's chief ethics lawyer during the George W. Bush administration.

In a statement to the BBC, Trump's team dismissed these concerns.

In his first term, President Trump “exited himself from his multibillion-dollar real estate empire to run for office and gave up his government salary,” Trump spokeswoman Carolyn Leavitt said.

“Unlike most politicians, President Trump does not get into politics for profit — he fights because he loves the people of this country and wants to make America great again.”

But Trump has taken little action in response to concerns about the potential or appearance of corruption as he prepares to return to the White House.

Trump has faced questions about conflicts of interest before.

During his first term as president, the Trump International Hotel in Washington, D.C., became a symbol of this issue, as a place where lobbyists, foreign diplomats and allies came to stay and spend.

Critics argued that the hotel created a way for Trump to indirectly benefit from his office. He faced accusations and lawsuits alleging he violated the U.S. Constitution's ban on presidents receiving foreign emoluments — or benefiting from their office.

But the growth of his business empire, which now includes a publicly traded social media company, a cryptocurrency company and ties to a Saudi-backed golf league, makes it possible for anyone hoping to curry favor to move money more quietly and in a more discreet manner, experts said. Much larger amounts.

“The volume has increased and the ease has increased,” said Michael Olrogg, a law professor at New York University, who has studied Trump Media, which runs Truth Social and now accounts for the bulk of Trump's $6 billion fortune. “You can only book so many hotel rooms.”

For example, a foreign government or company can buy advertising that convinces investors that a company is gaining traction, resulting in a spike in its stock price, Professor Olrogg said on Truth Social.

Although Trump Media has a market capitalization of more than $7 billion, there have been little signs of such activity so far. The company reported advertising sales of less than $5 million this year.

But given the “ballooning” influence of the stock market, Professor Olrogg said it would not take much spending to generate potentially big gains for Trump, who owns more than half the company's shares.

Nowhere has the intertwining of Trump's business interests and his public duties been more evident than in the cryptocurrency industry, where he has deepened his personal involvement, while at the same time promising to defend it while in the White House.

His plans include regulatory rollback and ideas like a national bitcoin reserve, where the government would store the cryptocurrency.

“One of the most important issues that will be determined over the next two years is how to regulate cryptocurrencies,” said Virginia Kanter, senior ethics counsel at the nonpartisan Citizens for Responsibility and Ethics in Washington. “Well, he's now an active player in the cryptocurrency market. How it's regulated (could) impact his personal wealth, and what kind of position he takes.”

Nick Bhatia, founder of Bitcoin Layer, a company that advocates for investments in Bitcoin, said it would be a mistake to dismiss Trump's stance on cryptocurrencies as being driven solely by his own financial interests.

He said: “I do not see that the motivation behind these moves is self-interest, but rather I see them as representing voters.”

But he said: “I think there is potentially a conflict of interest that his pro-crypto stance would benefit his company.”

Trump said this week he would nominate Paul Atkins, who has lobbied for the industry, to lead the Securities and Exchange Commission (SEC).

He is widely expected to step back from enforcement at the agency, which monitors publicly traded companies like Trump Media for issues such as fraud and insider trading. The Securities and Exchange Commission has overseen a crackdown on the cryptocurrency industry under President Joe Biden.

Sun, the World Liberty Financial investor, was arrested in the SEC's crackdown last year, after the agency accused him and his company of failing to properly register with the government while selling certain digital assets, among other charges.

Under new leadership, the agency could drop the case, said John Coffey, a professor at Columbia Law School and an expert in securities law.

“Mr. Atkins' main characteristic is that he does not like enforcement and wants to significantly restrict the scope of cases that the SEC will bring,” he said.

When announcing his investment last month, Sun did not mention the SEC complaint — which he said lacked merit — but cited Trump's views on cryptocurrencies.

“The US has become a blockchain hub, and Bitcoin owes it to @realDonaldTrump!” He wrote on X. “TRON is committed to making America great again and driving innovation. Let's go!”

There is little in US law that sets limits on conflicts of interest, and presidents are not bound by the same rules that regulate other government employees and government officials.

Although the US Constitution theoretically bars presidents from receiving gifts from foreign governments while in office, the Supreme Court has already dismissed two previous cases from Trump's first term involving potential conflicts of interest.

Last summer, in a case involving Trump, it also ruled that presidents enjoy broad immunity from criminal prosecution while in office.

In the past, Trump has said his business was actually hurt by his time in the White House, as partners were concerned about the controversy that led to the severing of ties, and he faced investigations and lawsuits.

Now Trump is preparing to enter the White House for a second time, and he has not yet revealed an ethics plan, as is usual, and given little indication that he intends to give in to such concerns.

He has pledged to retain his stake in Trump Media, and continues to promote Trump-branded merchandise and lend his name to ventures such as World Liberty Financial. His Mar-a-Lago club remains a place where wealthy people willing to pay for membership can access the president with little transparency.

Ethics experts fear that Trump has opened a door that will be difficult to close again.

“Trump got the message that he could do whatever he wanted, because he won,” Painter said. “Future presidents will look at this and think,we We can do whatever we want.”