The lawmakers are especially concerned about the launch of the TRUMP meme coin and its potential risks to national security and ethical standards. Waters criticized the timing of the coin’s launch and warned that it could serve as a financial backdoor for bad actors, while Representative Gerald Connolly called for an investigation into Trump’s crypto ventures, including the World Liberty Financial platform. Meanwhile, speculation suggests that the Trump family could deepen their involvement in crypto.
Maxine Waters Questions Trump's Crypto
California Representative Maxine Waters, the ranking Democrat on the US House Financial Services Committee, voiced some serious concerns about President Donald Trump’s meme coin launch. She suggested that it could pose risks to national security and open the door to corruption. During a Jan. 22 committee meeting, Waters criticized the Republicans’ oversight plan for the 119th Congress, which she claimed ignored the need for scrutiny of cryptocurrency firms and financial institutions, including the activities of the sitting president.
Waters pointed out the troubling timing of the TRUMP token launch, which happened just two days before Trump’s inauguration. She also suggested that the project could serve as a financial backdoor for sanctioned individuals, hostile governments, and other bad actors to channel money directly to Trump and his associates. Additionally, the Republicans’ plan does not address potential conflicts of interest arising from these kinds of activities.
(Source: US House Committee on Financial Services)
French Hill, the new Republican chair of the committee, outlined his party’s plan to focus on providing legal clarity for digital assets and expanding financial literacy. While Hill and his party plans on encouraging innovation in decentralized finance, Waters accused the former president of exploiting his position of power for personal financial gain through the meme coin. In fact, the TRUMP token reportedly boosted Trump’s personal wealth quite a bit, and he has already faced backlash from crypto enthusiasts and Trump supporters criticizing it as a blatant cash grab.
Waters also recently warned that the meme coin could be a vehicle for a potential “rug pull,” that might leave investors at risk if insiders suddenly decided to sell their stakes. Despite these warnings, the TRUMP token surged more than 400% in value since its launch.
Lawmaker Demands Probe into Trump's Crypto Ventures
Another Democratic lawmaker urged the US House Committee on Oversight and Government Reform to investigate whether President Donald Trump’s crypto ventures conflict with his responsibilities as president. In a letter from Jan. 21, Representative Gerald Connolly from Virginia raised concerns about Trump potentially profiting from his World Liberty Financial (WLF) platform and the Official Trump (TRUMP) meme coin, and suggested that these activities may breach ethical standards and pose national security risks.
Connolly’s letter
Connolly singled out WLF as especially concerning because its largest investor, Tron founder Justin Sun, has been charged with securities fraud by the US Securities and Exchange Commission (SEC). Sun’s $75 million investment in WLF allowed Trump’s business to surpass its revenue threshold, potentially funneling cash directly to the president. Connolly warned that financial entanglements like this raise serious concerns about foreign influence on US policy.
He called on the Oversight Committee to tackle these issues, and argued that failure to act quickly will undermine the committee’s credibility and its ability to enforce ethical standards. Connolly also criticized Trump’s disregard for the Presidential Ethics Reform Act, which mandates financial disclosures and conflict-of-interest checks.
The controversy surrounding Trump’s crypto ventures intensified after the launch of the TRUMP meme coin. A few eyebrows were also raised after Trump was questioned about the meme coin during a press conference on Jan. 21. Trump proudly admitted to having very little knowledge about the token.
Ethereum Business in Trump Family’s Plans?
Despite the concerns that were raised by lawmakers and the crypto industry in general, the Trump family may now be preparing to deepen its involvement in the crypto sector by launching an Ethereum-based business. Speculation grew after Joseph Lubin, Ethereum co-founder and founder of Consensys, hinted at this possibility in a Jan. 21 post, which suggested that the Trump administration could integrate Ethereum technology into government activities, similar to the use of internet protocols.
Lubin pointed to recent Ether purchases by Trump’s World Liberty Financial platform as a potential indicator of future plans. Arkham Intelligence data revealed that a WLFI-labeled wallet holds about 56,121 ETH, which is valued at more than $180 million. Ethereum is its largest holding after Circle’s USD Coin (USDC) stablecoin.
World Liberty Financial ETH holdings (Source: Arkham Intelligence)
The Trump administration’s involvement in crypto could also bring some much needed regulatory clarity to the industry that could encourage the convergence of traditional finance and blockchain technology. Franklin Templeton CEO Jenny Johnson and Bitget Research chief analyst Ryan Lee both believe that clearer regulations could boost market legitimacy and pave the way for financial innovations like crypto-based ETFs and tokenized assets. However, they also warned of challenges like increased compliance costs, security risks, and market volatility.
At the same time, the Trump family’s meme coins are raising concerns about potential legal and regulatory challenges. Anndy Lian, an intergovernmental blockchain adviser, cautioned that these tokens might blur the lines between celebrity, politics, and finance, which could potentially prompt the SEC to enforce even stricter regulations. Without clear guidelines, the market could face increased risks of manipulation, scams, and volatility, which might undermine the credibility of cryptocurrencies entirely.
Coinbase Resolves Backlog Issue
Trump meme coins are not just wreaking havoc on the nerves of lawmakers. Coinbase CEO Brian Armstrong announced that the Solana backlog issue, which caused transaction delays of up to 21 hours, has been resolved. In a Jan. 22 post, Armstrong apologized to Coinbase users for the inconvenience and encouraged those with canceled transactions to retry. The congestion was caused by the frenzy surrounding the launch of Donald Trump’s TRUMP meme coin, as traders rushed to purchase the token.
The TRUMP meme coin launch also caused a surge in traffic on the Solana network on Jan. 20, which overwhelmed applications but luckily did not cause a network outage. The event had a huge impact on Solana, and drove the price of SOL to an all-time high on Jan. 19. Solana’s total value locked rose to $13.9 billion, according to DefiLlama, while network transaction fees spiked to reach $17.8 million on Jan. 19 and $11.7 million on Jan. 21. For comparison, daily transaction fees in December of 2024 ranged between $2.7 million and $5.25 million.
Solana’s price action over the past week (Source: CoinMarketCap)
Data from CoinMarketCap revealed that Solana’s market capitalization grew to approximately $127 billion during the rally. The meme coin frenzy also fueled interest in crypto overall as Google search volumes for terms like “buy Solana,” “buy crypto,” and “Coinbase” hit peak levels during the week of Jan. 19. “Buy Solana” reached a score of 100 on Google Trends, which is the highest possible search interest.
