No Limits: Crypto Scams Set to Proliferate in 2025

In the Trump 2.0 administration, there are no rules. Junk crypto coins are set to proliferate, which may lead to dangerous asset bubbles and broader instability.

No Limits: Crypto Scams Set to Proliferate in 2025
Eric Trump has proposed eliminating capital gains taxes on "US based" crypto projects. (Photo: Yahoo)

Donald Trump drew attention when he launched a so-called "meme coin" immediately before his inauguration. The value of the cryptocurrency, called $TRUMP, reached a price of $73 within a day of its release, giving it a total market valuation of about $72 billion. With Trump controlling 80% of the supply, his share would have been worth about $58 billion. A day later, a $MELANIA coin was offered which spiked to a total valuation of about $13 billion, and seemed to spark a retreat for both coins.

Even with both coins significantly off their peaks ($TRUMP down 64%; $MELANIA down 81%), the Trumps now possess holdings of roughly $21 billion for $TRUMP and $1.8 billion for $MELANIA. Many were quick to point out that Trump's assets are now largely on paper, with roughly $4.5 billion in $DJT stock (the holding company for his social networking site Truth Social), less than three billion in other assets like real estate, and now potentially tens of millions in meme coins. This would seem to make a mockery of the Constitution's emoluments clause, as anyone wishing to enrich the President can do so merely by buying junk coins.

While the Biden administration sought to regulate meme coins as securities, the Trump administration is taking a hands-off approach. David Sacks, a venture capitalist and former COO at PayPal who has been tapped by Trump to serve as his AI czar, has argued that meme coins should be treated as collectibles, like baseball cards or stamps. Eric Trump, meanwhile, is pushing the idea that "US-based" crypto projects should be free of capital gains taxes, giving meme coins with no inherent value a significant tax advantage over traditional investments in stocks and bonds, which may have a corrosive effect on equities markets.

Why even work, when day-trading memecoins is more profitable? What becomes to a generation of young men who become radicalized with anti-government rhetoric, and who have no skills or work experience outside of manipulating meme coins?

Solana and XRP

When it comes to "US based" crypto projects that may benefit from zero capital gains taxes, two companies stand out: Solana Labs and Ripple. Solana Labs was founded by Anatoly Yakovenko and Raj Gokal in 2018, and offers a blockchain (distributed ledger) solution called Solana on which the $TRUMP and $MELANIA meme coins are based. Solana enables a relatively turnkey, frictionless experience for those wishing to offer new, potentially tax-advantaged, meme coins. Current estimates suggest that 94% of meme coins are being offered on the Solana platform.

The process is fairly simple: decide how many coins you want to issue in total, how many you wish to make available for sale, and how many you wish to hold in reserve. In the case of $TRUMP, they issued 1 billion coins, with just 200 million of them up for sale. The price per coin soared as high as $73, before dropping under $30. Given the family's 800 million coin holdings, the total valuation ranged from as high as $59 billion to a current value of about $23 billion. The $MELANIA coin worked the same way, but with only 150 million of 1 billion coins for sale. This is ridiculously easy money for no work, and with no economic value of any kind being created.

XRP is another currency which is being floated as a fast and efficient blockchain-based payments solution, particularly for inter-bank transfers. Run by the company Ripple, it is seen as a competitor to Bitcoin for digital payments solutions. And there is a major rift between Bitcoin proponents and those who favor XRP.

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Senator Cynthia Lummis has been championing the idea of a "Strategic Bitcoin Reserve" wherein the US government would sell gold in exchange for Bitcoin holdings. Dennis Porter, a Bitcoin advocate who runs the Satoshi Action Network, has been advocating for multiple states and countries to do the same, and has been collaborating with Lummis.

Within the Bitcoin community, there is also disagreement over whether to engage with government. Many Bitcoin evangelists distrust government and do not want its support, even if it leads to higher valuations. Others feel that it is only by government embrace of Bitcoin that it can ever truly succeed.

One thing all Bitcoiners agree on is a disdain for CBDC's, Central Bank Digital Currencies. The thinking is that a digital US dollar will function similarly to the digital Yuan in China and allow for centralized control and coercive social practices. Even though there is no actual plan for a US CBDC, President Trump issued an executive order last week banning any work on CBDC-related research.

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Elon Musk fueled rumors that he would partner with Ripple to provide the payments layer for X, which the company has been promoting since last year. Musk posted, "$XRP is looking quite promising," deleting the post seconds later. Similarly, Eric Trump's comments about zero capital gains for US-based crypto projects have been perceived as directly addressing XRP, Ripple, and Solana.

Eric Trump Confirms Zero Capital Gains Tax for Specific Crypto in the US
Eric Trump has reportedly confirmed upcoming tax policies exempting U.S.-based cryptocurrencies such as XRP and HBAR from capital gains tax.

MMM: Money for Nothing

I've written previously about MMM, a naked Ponzi scheme run in Russia by Sergei Mavrodi for the sole purpose of getting rich quick. (Watch the television ads — you'll recognize the vibe.)

MMM offered no pretense of legitimacy, but appealed to exhausted Russians who wanted a simple pathway to financial independence and material wealth. Such schemes contributed to perceptions that wealth is just a game and that markets aren't inherently real. Arguably, this has played a role in the Putin regime's efforts to consolidate power in the hands of the state and its oligarch agents.

It appears as if a similar decoupling from reality is taking place now under Trump and Musk. Long established laws (emoluments clause; securities regulation; anti-fraud and know-your-customer; capital gains) are being tossed out the window in favor of a laissez faire approach that breeds criminality.

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Many dismiss all of this as something akin to tulip mania. But that is a mistake: first, the 'tulip mania' didn't actually happen. Charles Mackay, who popularized the tale in his 1841 Extraordinary Popular Delusions and the Madness of Crowds, got it wrong. According to historians who have investigated it subsequently, the phenomenon had limited economic impact and led to no known documented bankruptcies. Mackay intended his account as a morality tale, and it has been culturally absorbed to mean "stay out of bubbles and you won't get burned."

Our situation is different. It's not enough to simply stay out of risky financial products, because they also harm non-participants. Powerful forces are seeking to reshape the economic landscape for geopolitical reasons. Expect disruption and disorder. As the quote goes (and its source is disputed), "You may not be interested in war, but war is interested in you." Everyone should have a working knowledge of the broader financial landscape.

As stocks have been disrupted by Chinese innovations in AI, and the US government is remade by Trump, Musk, and Project 2025, there are increasing efforts to solve problems we don't have by replacing the current financial system with new technology. The implication is that central banks are on the brink of collapse due to debt, and that we must adopt crypto now to avoid disaster. This simply isn't true, and the dollar is as strong as ever.

We do, however, have a pending disaster with the debt ceiling. We have already implemented "extraordinary measures" to avoid default, which will last us a few months. The federal budget must also be addressed by March 14th. And these real concerns are being overshadowed by crypto scams.

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Trump's dangerous experimentation with tariffs and reckless disregard for the law is straight out of the fascist playbook: create a problem and then impose a solution. It also mirrors the "shock therapy" used in Chile under Pinochet, and in Russia under Yeltsin. Even as junk coins are inherently worthless, they promote bubbles that drive greater instability. Push back on this, and loudly. All of this benefits people with power — all of it erodes democracy. We may not be able to survive this assault, but there is absolutely no reason to legitimize it.

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WHITE PAPER by Dave Troy: Managing Financial Instability in 2025

Additional Reading

The distributional consequences of Bitcoin
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Will Elon Musk and Mike Johnson use their influence and power to bankrupt the United States? Republicans who aren’t on board with a global catastrophe must prepare to block them.
Paranoia on Parade | Washington Spectator
How reactionary grievances have helped bring America’s democracy to the brink of collapse