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Sens. Elizabeth Warren (D-Mass.) and Richard Blumenthal (D-Conn.) sent a letter to the Securities and Exchange Commission (SEC) demanding an investigation into President Trump’s meme coin that they worried could be a “rug pull.”
“Your agency is responsible for promoting integrity, stability, and fairness in our financial markets, and must investigate this matter further to ensure investors and our markets are adequately protected—no matter who, or how powerful, the individuals involved are,” the lawmakers wrote on Monday.
A “rug pull” in cryptocurrency occurs when, after raising assets from the public through the sale of tokens, investors shut the project down or disappear with the raised tokens. The pull can occur over a period of time, which the Senate Democrats allege follows the pattern of the $TRUMP coin.
The coin was launched just prior to Trump’s inauguration and reached a peak of about $9 billion on Jan. 19, 2025, with Trump making $636 million from the coin, according to The New York Times. The coin is now worth less than $400 million, a downfall of 97 percent, according to a report from Blumenthal.
Trump defended his crypto profile in July, telling reporters at Joint Base Andrews in Maryland, “I don’t get involved in my personal. We have funds that run my money.”
“They invest my money. I don’t talk to them. I don’t even speak to them,” he continued.
This came after Trump revealed in his financial disclosures that he pulled in more than $500 million from his cryptocurrency venture World Liberty Financial, which was co-founded with his sons.
In the past, the SEC pursued a prosecution against blockchain engineer Eric Zhu for a fraudulent “rug pull” scheme. Later in February, the SEC revised its guidance that clarified a meme coin is not a security, meaning it is not under federally protected by securities laws, moving it to a case-by-case basis.
The senators argue that this is one case that should be investigated due to the Trump meme coin losing much of its value.
“Given sharp depreciation in the coin’s value—despite the hype coming directly from the President’s own public statements—the SEC must investigate whether a fraudulent scheme may be underway, and prevent further extraction of enormous value from the hundreds of thousands of investors who put their faith in Trump’s coin,” they wrote.
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