While Donald Trump continues to resist releasing his tax returns, his mandatory financial disclosures became public earlier this month. What particularly piqued media interest is the amount he and his associated entities made through cryptocurrency ventures.
In that disclosure, Trump received over $500 million from 10 transactions connected to World Liberty Financial, a cryptocurrency venture owned by Donald Trump and his sons. He also received $635 million in royalties from an obscure entity known as Celebration Coins. While there is no public information about this entity, it is believed to be connected to the $TRUMP meme coin.
Learning After Law School
Once you’ve got your law degree, how do you keep your professional skills up to date? Share your perspective in this brief survey, and you may be eligible to win a $250 gift card.
But not everyone who invested in the Trump-branded coins did as well as Trump did. A report from the cryptocurrency analytics firm Nansen stated that almost a million people who purchased the Trump meme coin lost money totaling $3.81 billion.
A cryptocurrency connected to World Liberty Financial is the $WLFI coin. This coin, while it is ostensibly promoted as a voting tool to allow holders to vote on platform upgrades, is publicly traded with volatile values. The value of $WLFI has dropped at least 80% from its peak.
The $TRUMP memecoin went to $1.56 (at the time of publication) from its peak of $75.35. The sudden loss of 98% of its value is common with meme coins, with one of the more famous cases involving the Hawk Tuah girl.
Despite the large number of people losing money, very few of them talked to news outlets about their losses. Most feared retribution from Trump and his supporters, others were too embarrassed, and a few were optimistic that the crypto values would bounce back. None of them would openly state whether they thought they were scammed.
Schenck Price Works Smarter with Lexis+ AI and Protégé
LexisNexis sat down with John Ursin, Managing Partner at Schenck Price, to learn how the firm is using legal AI to strengthen client service and daily legal work.
So were the purchasers of Trump’s coins scammed? Or was their purchase a bad investment? Just to be clear, losing money on an investment by itself does not show fraud.
The line between outright fraud and high risk investments tends to be blurry but generally involve specific intent to deceive by the cryptocurrency holders. Investors must have been induced to send their money to scammers through knowingly false statements, material omissions, fabricated information, or other intentional misrepresentations.
For example, in investment scams, the scammer promises higher than average returns by showing fabricated reports to potential victims, photos of the scammer driving expensive cars or standing next to notable investors. Scammers also use fake investment programs to show the victim that his balance is rising exponentially.
On the other hand, in legitimate investments, even those that are high risk, the promoters make it very clear to investors about risk of loss and volatility. They welcome due diligence and welcome questions from skeptical investors. Alternatively, they can be very vague about potential outcomes and goals and leave it to the individual investor to do their own due diligence in order to make an informed decision.
The fraud can be blurry. Scammers can also recite the disclaimers about risk of loss but if they make contradictory or false statements later, that could negate the disclaimers.
So in the case of Trump’s coins, there are indications that World Liberty Financial was transparent about its operations concerning its governance coin $WLFI. The disclaimer on the company’s website states that an entity associated with Donald Trump will receive fees from World Liberty Financial equal to 75% of $WLFI token sale proceeds after deduction of agreed expenses.
However, this language is in very small print and in the middle paragraph of a very long disclaimer. One may question why this important information is buried.
As for the $TRUMP meme coin, its creators must have seen what happened to the founders of similar coins that crashed and burned soon after launch, so they kept things very vague. Their website states that $TRUMP coins are intended to function as an expression of support for, and engagement with, the ideals and beliefs embodied by the symbol “$TRUMP” and the associated artwork. It clearly states that $TRUMP is not intended to be an investment opportunity, investment contract, or security of any type.
But again on the fine print, it discloses that an affiliate of the Trump Organization will receive revenue derived from trading activities of the meme coins. It also says that the coin uses the Trump name, image, and likeness of Donald Trump pursuant to a limited licensing agreement — which ended up being the $635 million mentioned above.
So it appears that Trump’s cryptocurrency operations were upfront about Trump and his associated entities receiving money through licensing agreements and transaction fees. This mainly ensures that Trump will get paid regardless of whether the coins succeed or fail. But the fact that this disclosure is buried could raise questions about transparency which could still make a fraud case viable.
There are reports that very large owners of Trump’s cryptocurrencies or ventures may have received special treatment not feasibly available to retail investors.
In January 2025 (days before Trump’s inauguration), an entity linked to Sheikh Tahnoon (Abu Dhabi royal, national security adviser, and head of major investment vehicles like MGX and G42) secretly agreed to buy a 49% stake in World Liberty Financial for $500 million. Half was reportedly paid upfront to Trump-linked entities. Shortly afterward, the Trump administration approved access for UAE-linked entities to hundreds of thousands of advanced U.S. AI chips (despite national security concerns about potential diversion to China).
There are also reports that the top holders of $TRUMP coins were given special privileges such as being invited to galas.
Trump’s cryptocurrency ventures do not appear to meet the classic legal definition of a scam involving outright fraudulent promises. But while losing money on a high-risk investment is not evidence of fraud, the combination of asymmetric risk, opaque benefits for insiders, buried disclaimers, and the blending of presidential influence with family business interests invites scrutiny. In today’s hype-driven markets, insiders can extract enormous value while ordinary participants bear nearly all the downside. Whether this constitutes fraud is a question for regulators and the courts. For investors, the clearer lesson is caution. When something sounds too good to be true, it very often is.
Steven Chung is a tax attorney in Los Angeles, California. He helps people with basic tax planning and resolve tax disputes. He is also sympathetic to people with large student loans. He can be reached via email at [email protected]. Or you can connect with him on Twitter (@stevenchung) and connect with him on LinkedIn.