Senators Ask SEC to Probe $TRUMP After $3.8B Losses

Senators Elizabeth Warren and Richard Blumenthal asked the U.S. Securities and Exchange Commission on Aug. 4 to investigate the $TRUMP memecoin after reports that nearly one million investors suffered large losses while entities linked to President Donald Trump received substantial receipts. The senators urged SEC Chair Paul Atkins to use the agency’s authority to examine the token’s issuance, trading and distribution.

The memecoin launched on Jan. 17, 2025, three days before President Trump’s inauguration. The president promoted the token on X the next day. Blockchain analyses cited by the senators indicate about 988,905 buyers held combined losses of $3.81 billion through June. The analyses also show that earlier or more active traders realized roughly $4 billion in gains before the token declined about 98% from its peak.

The senators’ letter reports that Trump-linked entities collected about $636 million tied to the token. On-chain data cited in the request indicate those entities control roughly 80% of the token supply under a three-year vesting schedule. The senators described that concentrated ownership as giving a small group influence over future circulation. The letter referenced large transfers to custodial services, including 10.84 million $TRUMP moved to Bitgo on July 25, valued at about $16.9 million, and three transfers over five months totaling about $172.4 million.

A minority staff memorandum from the Senate Permanent Subcommittee on Investigations compiled investor accounts describing steep losses and feelings of abandonment after the token’s collapse. The senators wrote: “We request that you exercise your authority to investigate the President’s memecoin to detect any illegal fraud or unjust enrichment that the coin may have facilitated.” The letter asked the SEC to determine whether the token’s issuance and trading involved unlawful conduct and to report findings to Congress.

Congress is debating broader cryptocurrency legislation, including market-structure rules and limits on officials profiting from digital assets. The senators tied their request to those legislative discussions and asked that the SEC review the memecoin while lawmakers consider changes to oversight and market rules.

Federal regulators have warned investors about the risks of memecoins. The SEC’s Division of Corporation Finance describes many memecoins as speculative assets driven by trading demand and online attention; some fall outside routine securities registration but require case-by-case legal review. State regulators have flagged sentiment-based tokens for vulnerability to manipulation, pump-and-dump schemes and sudden price collapses. The SEC has pursued enforcement in similar situations, including an action alleging a liquidity-pool rug pull that misappropriated funds.

The senators noted that promotion of Trump-branded products continued while hundreds of thousands of wallets remained underwater. Their letter asks the SEC to report its findings to Congress as lawmakers develop rules for digital-asset markets.