Clarity Act sits idle over Trump ethics question as Warren asks SEC to investigate him

Senator Elizabeth Warren is pushing for the U.S. Securities and Exchange Commission to investigate President Donald Trump's memecoin in a request coinciding with the crypto market structure bill's debate over ethical constraints on government officials' digital assets ties.

Warren, along with fellow Democratic Senator Richard Blumenthal, made the request to Trump's appointed SEC chairman, Paul Atkins, to probe the estimated $3.8 billion in losses from almost a million investors in $TRUMP. The president's recent financial disclosure indicated he'd made $636 million off the token, the lawmakers noted.

"While all cryptocurrency trading involves risk, such a stark asymmetry raises questions about how the president made his cryptocurrency fortune, including through potentially fraudulent enrichment schemes with implications for market integrity and stability — not to mention the financial well-being of nearly a million American investors," the lawmakers argued in the letter to Atkins dated Monday.

The $TRUMP coin was worth more than $46 at its height, but it steadily declined to its current price of $1.47. The token saw brief spikes in value when the company behind it announced it would host dinners — including at Trump’s Mar-a-Lago, with the president as the keynote speaker — but that price action was temporary both times.

In what's likely to pack more political needling than actual regulatory results, the letter comes as negotiators hoping to finish the Digital Asset Market Clarity Act are awaiting the White House's response to the latest revamping of the contentious section that would ban senior government officials from direct involvement in crypto projects.

For its part, the SEC has already ruled memecoins as generally outside its sphere of influence. In one of the early staff crypto statements after the Trump administration took over, the agency declared that memecoins have "limited or no use or functionality" and don't check a box as securities under the law.

The ability for a government official, such as President Trump, to issue such a token is at the center of the negotiation over the ethics section of the Clarity Act. Trump recently agreed to be subjected to a limit, though the restrictions he agreed to would have very narrow practical effect. Democrats refused the approach and said they'd oppose the legislation unless that provision was made stronger, so Senators Thom Tillis, a Republican, and Ruben Gallego, a Democrat, negotiated a tougher version. The rewrite was sent to the White House last week, which hasn't yet responded days later.