Investors Lost More Than $2B on Trump Coin

The cryptocurrency token President Trump launched days before his inauguration made a lot of money for a few dozen early investors, but hundreds of thousands of others lost money on the $Trump memecoin. The New York Times reports that according to crypto forensics firm Chainalysis, some 810,000 buyers lost a total of more than $2 billion after the coin's price nosedived. The Times notes that the total losses are probably a lot higher because the data doesn't include figures from some popular crypto marketplaces. The price hit its peak of around $75 on Jan. 19, the day before the inauguration. It is now just over $16.

"No evidence has emerged that Mr. Trump or his associates artificially inflated the coin's price or engaged in insider trading," the Times notes, though some analysts believe some traders may have acted on inside information. The account that spent $1,096,109 in the first large $Trump purchase was created just three hours before the coin was launched. Some 31 early large traders that the Times calls the "Lucky 31" made $669 million in profit in the coin's early days. According to Chainalysis, some 700,000 crypto wallets that cashed out early on made a total profit of around $6.6 billion. The Trump family and its partners, meanwhile, have made around $100 million in trading fees.

After the coin was launched, Trump said he didn't know much about the coin apart from the fact he launched it, Rolling Stone reports. Analysts say the pattern with the $Trump coins resembles what happened with "pump and dump" memecoins that regulators have warned about. Some critics have also expressed concerns about the role of foreign buyers. "The president is participating in shady crypto schemes that harm investors while at the same time appointing financial regulators who will roll back protections for victims and who may insulate him and his family from enforcement," says Corey Frayer, an adviser on crypto issues who recently left the Securities and Exchange Commission. (More cryptocurrency stories.)