Jessy, Golden Finance

Less than three days before he took office as President of the United States, Trump issued a coin.

The official account of Trump The overall market value reached its peak at US$82 billion, and the circulating market value also reached US$16.4 billion at this time.

When the token’s circulating market value was at its highest, it exceeded the combined market value of Trump’s two listed companies, Trump Media Technology Group and Digital World Acquisition.

Not only did Trump himself issue coins, seeing the huge benefits behind Trump coins, Trump’s wife also issued related Meme coins. After three months of slow fundraising, WLF, the project previously launched by his family, quickly completed its fundraising on the morning of January 20 due to the popularity of Trump coins, selling 20% ​​of its total tokens to raise 3 billion dollars. After the fund-raising was completed, its project opened an additional token sale of 5% of the total number of tokens, and the mutual public offering price was three times the original price.

Previously, Trump issued NFT after leaving office as the first president, but the response was mediocre. This choice was made three days before taking office. This is undoubtedly a time when the traffic is high and it seems that legal risks can be avoided.

With the right time, place and people, the Trump family made a lot of money through this round of coin issuance. However, after the short-lived emotional climax of getting rich with Trump coins, the currency circle ushered in a sharp decline. On January 20 On that day, Bitcoin once fell below $100,000.

Hidden concerns have emerged, first of all, whether Trump’s own behavior involves illegality, and is he at risk of being impeached?

This behavior of issuing coins to collect money three days before going online seems to have a very bad direct impact on the encryption industry. First of all, for outsiders, the stereotype that encryption = casino is more firmly established. .

Secondly, Trump’s extraordinary behavior has increased the uncertainty faced by the introduction of a series of decrees and regulations that he previously promised will benefit the development of the encryption industry.

An even more fatal impact is that the currency circle has used votes and capital to support Trump as president, hoping that he can guide the further compliance development of the encryption industry. Trump’s behavior of issuing Meme coins before taking office also made people in the industry suspicious and lost confidence in it.

However, some people believe that Trump’s extraordinary behavior will broaden the boundaries of Web3-related laws in the United States.

The legal risks of Trump’s currency issuance have basically been avoided

Choose to sell tokens before the official inauguration of the president, especially This behavior of the Trump family is undoubtedly intended to avoid legal risks while maximizing the conversion of the capital of the "president" into economic value.

In fact, TrumpThe Pu family has basically avoided legal risks.

First of all, its currency issuance behavior currently does not seem to involve official corruption, accepting bribes, etc. Lawyer Xiao Sa, a senior partner at Beijing Dacheng Law Firm told Golden Finance that the President of the United States has the legitimate right to obtain "bribes". This is the donation system of the President of the United States. However, donations are subject to various conditions. According to the provisions of the U.S. Federal Election Campaign Law, U.S. presidential candidates are not allowed to accept donations from foreigners, persons with contractual relationships, banks, companies, labor unions, etc. TIn other words, first, presidential candidates are not allowed to accept donations from foreigners. Second, this regulation only regulates “donations”. The so-called donation is a donation in the form of legal currency such as cash.

If Trump issues virtual currency, it will inevitably cause foreigners to make profits through large-scale purchases of virtual currencies, and Trump will not officially take office before , is still considered a "presidential candidate", so if he issues his own virtual currency before officially taking office, he will inevitably run a huge risk of violating the Federal Election Campaign Act. If you follow this logic, then Trump must have broken the law.

However, Trump will not bear the above-mentioned legal risks. The reason lies in the U.S. Federal Election Commission (FEC)’s determination of the nature of virtual currencies. In fact, as early as the beginning of Trump’s first term, the Trump Federal Election Commission (FEC) ruled that virtual currencies can be regarded as non-cash donations similar to stocks, bonds, etc. Non-cash donations are exempt from federal election campaign laws that prohibit foreigners from making contributions to U.S. presidential candidates. In other words, virtual currency is not cash. If it is not cash, it is not subject to the cumbersome regulations of the US donation system.

Liu Honglin, founder of Shanghai Mankiw Law Firm, told Golden Finance that current U.S. law does not prohibit the president from getting involved in private business while in office. . The tacit understanding established by past presidents of the United States is generally to hand over the company to relatives for trusteeship and to truthfully report the company's operating status to the tax department for review. For Trump, his family business will be left to his family to take care of during his term. During the election, the financial disclosure statement he submitted as required by law showed that his financial interests are reflected in more than 500 companies, and he owns a large number of commercial buildings, hotels, golf courses and other properties around the world, as well as other businesses.

However, in the author’s opinion, even if there are no strict legal restrictions, the business activities of the US president will be closely watched and supervised by opponents, the media and the public. If the president's business behavior is deemed inappropriate or not in the public interest, he may face tremendous pressure from public opinion and public opinion, and may even affect his reputation and approval rating.

At present, the currency issuance behavior of him and other members of his family has caused a big stir in public opinion.There has been a lot of criticism and dissatisfaction. For example, the New York Times criticized that the essence of "Trump Coin" is that Trump is "using his presidency to seek personal gain." Adav Noti, executive director of the non-profit organization "Campaign Legal Center", said that Trump holds 80% of "Official Trump" through his NFT company CIC Digital, which means that he may obtain huge economic benefits from it. , "This is actually exploiting the presidency for profit - creating a financial instrument that allows people to transfer funds related to their office to the presidential family, which is unprecedented."

Does Trump and his family’s currency issuance violate the relevant provisions of securities laws? Dismantling the various specific sales details of the token sale, we will find that in the terms of the sale, it is mentioned many times that the Trump token is not a security, and the user's purchase of the token is not an investment behavior, but to express the interest in the token. Support and participation in the ideals and beliefs embodied in the symbol "$TRUMP" and related artwork.

Although the token wants to avoid the various legal risks faced by being classified as a "security" in the sales documents. But Xiao Sa believes that theoretically, he may still face legal sanctions (although the president has the right to pardon himself, the negative impact may be greater if he does so). In detail, the supervision of virtual currencies in the United States is mainly responsible for multiple agencies, including the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), the Office of Foreign Assets Control (OFAC) under the Department of the Treasury, etc. These institutions set strict rules on the issuance, trading and use of virtual currencies.

According to the U.S. Securities Act of 1933 and the Securities Exchange Act of 1934, if Trump and its issuance are deemed to be "securities", then their issuance must Register with the SEC or qualify for an exemption. If the President fails to comply with these regulations by issuing virtual currency, it may constitute an illegal securities offering.

However, Xiao Sa said that the legal team behind the Trump family should have avoided various possible legal risks before issuing tokens.

Cryptocurrency is not gambling, but the boundaries of the law seem to need gaming to widen

And Trump’s The huge public pressure faced by the currency issuance behavior also makes people think about the impact of its behavior on the future development of the encryption industry.

The most direct thing is that Trump’s currency issuance behavior is a consumption of his presidential credibility. In particular, its WLF project immediately released 5% of the total token issuance for sale after the public sale. And Trump’s wife also took advantage of the popularity and issued a Meme coin. This has further deepened the stereotype of the outside world about the encryption industry: cryptocurrency = gambling. Indeed, the hype for Meme tokens itself isA gambling behavior, a very typical zero-sum game.

This crazy move by Trump can’t help but make people worry about whether the encryption-related decrees and regulations he promised can still be successfully introduced and implemented.

The decrees issued by the President of the United States will be supervised by relevant departments after they are promulgated. If problems are found in the implementation of the decree or the effect is not satisfactory, the decree may be adjusted or modified. The U.S. courts have the power to conduct judicial review of decrees issued by the president. If someone believes that the decree violates the constitution or the law, they can file a lawsuit in court, and the court will make a ruling based on relevant laws and constitutional principles.

However, in the view of lawyer Liu Honglin, Trump’s behaviorsmacks of performance art. Trump's acting style is "exaggeration" and he emphasizes "victory with large numbers" in everything. We will not do things on a small scale within the existing framework. If we want to do something, we will do it on a big scale. This is consistent with what Mr. Lu Xun said, "If you want to break a window, you are talking about tearing off the roof."

Liu Honglin speculated that in the future regulatory game between the US regulatory authorities and the president regarding Web3, Trump will continue to throw more bombs for officials to deal with. The boundaries of industry compliance development and the limitations of regulatory standards will be a process of continuous game and gradual expansion. On the contrary, this incident will benefit the future supervision and development of web3 in the United States.

The author partially agrees with this view of lawyer Liu Honglin, because American law itself is largely the result of the game between all parties. From the perspective of the legislative process, there is fierce competition among political parties within the U.S. Congress. The Democratic Party and the Republican Party are at loggerheads over numerous pieces of legislation due to their different ideas and demands from interest groups. Members of Congress also represent different interest groups, and there are also power checks and balances between the executive and legislative bodies. The president's legislative initiative needs to be approved by Congress. The president's veto power and Congress' override veto mechanism prompt both parties to find compromise points. Especially when the president and the majority party in Congress are different, the game becomes more intense. In addition, there are also games between the judiciary and the legislative and administrative agencies. Judicial review by the Supreme Court affects legislative and administrative decisions, and the appointment of judges has also become the focus of competition among all parties. These fully demonstrate that American law is the product of games between all parties.

On the one hand, Trump’s bold and “criticized” behavior will indeed broaden the boundaries of U.S. law on encryption supervision. Moreover, Trump’s Trump coin has indeed brought the crypto industry out of the circle. In the past two days, major mainstream media and social media have been discussing the “Trump” coin, and a large number of outside funds have entered the industry.

After Bitcoin fell below 100,000 US dollars on January 20, it broke through a new high this afternoon. According to the OKX exchange market, Bitcoin hit a maximum of 109,800 US dollars.

But the author is still worried. This is a project with no technological innovation. Its meaning may be to complete the transfer of wealth, and Trump and his familyThe family is undoubtedly the biggest beneficiary of this wealth transfer - the company under its name owns 80% of the token. Will such a project really benefit the development of the industry?