TD Cowen Warns Trump’s Memecoin Could Spark Partisan Strife, Delay Crypto Legislation Efforts

Much to the surprise of pretty much everyone, President Donald Trump launched a memecoin last Friday.

While waiting for his inauguration on Monday, he introduced the coin named ‘Official Trump’ with the ticker TRUMP. The coin soared initially, then plummeted as Melania Trump also revealed a memecoin of her own, but recouped and later took off again.

Related: Mark Cuban Says He Will Soon Launch a Trump-Style Memecoin to Pay US Debt

Since then, TRUMP has been trading in a range, seemingly stuck at the US$43 (AU$68.58) mark.

But, according to investment bank TD Cowen, the memecoin launch may have done more harm than good.

TD Cowen’s Washington Research Group said on Tuesday that the launch will potentially slow down progress for much-needed regulatory clarity in the space.

TRUMP Launch Complicates Efforts for Legal Clarity

The group around Jaret Seiberg wrote in a note that investigations by Democrats could focus on “whether foreign governments and business interests used token purchases to curry favor with Team Trump”.

This puts at risk the ability to advance the crypto bill with the bipartisan support it will need to become law. […] Our view is that anything which complicates the ability of Congress to agree on a bipartisan crypto market structure bill is negative for the crypto sector.’

TD Cowen

Seiberg predicts that as Democrats investigate TRUMP token trading and Trump family monetisation, Republicans will likely defend these activities.

This partisan divide will worsen as Trump’s team is unlikely to cooperate with Democratic investigations, which will complicate efforts to resolve legal confusion around crypto.

Democrats are going to demand details on who bought the coins and what is responsible for the increase in price. […] It is why we are concerned with Trump’s decision to issue a memecoin.

Jaret Seiberg, TD Cowen

Could China, Russia Have Bought TRUMP?

California Democrat Rep. Maxine Waters was one of the first to criticise the TRUMP launch, saying that the coin “represents the worst of crypto and shows why many regulators, advocates, and policymakers have long been worried”.

Related: Trump Play: Kyle Sandilands Says He Cashed in Big on Memecoin

The Democrat argued in a statement that large corporate and national donors could have bought TRUMP to “show their ‘respect’ for the President”, and could include US adversaries, like “Russia and China, which have much to gain from influencing a Trump presidency”.

Through his meme coin, Trump has created a way to circumvent national security and anti-corruption laws, allowing interested parties to anonymously transfer money to him and his inner circle.

Maxine Waters, California Democrat Rep.