Democratic Senators Elizabeth Warren and Richard Blumenthal have asked the SEC to investigate whether the TRUMP meme coin involved fraud or improper insider gains, as the token trades near $1.47, down about 98% from its all-time high. Nansen data show nearly 989,000 wallets carrying a combined $3.81 billion in losses. The request lands as senators remain split over an ethics provision stalling the CLARITY Act.
Warren and Blumenthal sent a letter to SEC Chair Paul Atkins asking the agency to determine whether the president-linked token involved illegal fraud or let insiders capture improper gains. The token trades near $1.47, down about 98% from an all-time high of $73.43.
Senators point to a possible "soft rug pull"
The senators reportedly asked the SEC to examine whether the project operated as a "soft rug pull" — a situation in which insiders gradually withdraw support or extract value instead of abandoning a project in one sudden move. According to CNN reporting cited by multiple outlets: "We are concerned that President Trump's memecoin scheme may constitute an illegal scam." Their letter does not establish that fraud occurred; the SEC would need to determine whether federal securities laws apply to the token and whether its promotion, distribution, or trading involved any violations.
Investors lost $3.81 billion after the January 2025 launch
The lawmakers cited the scale of losses on the Solana-based token, which launched shortly before Trump returned to the White House in January 2025. Blockchain analytics firm Nansen found that 988,905 of the 1.48 million wallets that bought TRUMP were carrying losses by the end of June. Their combined losses reached approximately $3.81 billion. Trump reported earning about $636 million from the coin. His wider crypto-related income exceeded $1.4 billion in 2025, according to financial disclosures reported by US media.
TRUMP traded near $1.47 on Aug. 4, with a market capitalization of approximately $366 million and daily volume near $159 million, according to CoinMarketCap.
Ethics dispute keeps stalling the CLARITY Act
The SEC request comes as senators remain divided over an ethics provision in the CLARITY Act, the broader bill meant to set US rules for digital asset markets. The White House has not responded to a bipartisan counterproposal from Republican Sen. Thom Tillis and Democratic Sen. Ruben Gallego, which would let state attorneys general sue the Justice Department if it fails to enforce restrictions on crypto activity involving federal officials. Warren has argued that passing the bill without stronger safeguards could expand conflicts of interest tied to Trump's crypto businesses. The delay pushed Polymarket's estimated chance of the legislation becoming law in 2026 to an all-time low of 24%.
Source: crypto.news
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