An invitation-only dinner for the 10 biggest holders of the TRUMP meme coin, held at a Trump golf club? Sounds like a recipe for success all right, is it success, or a slow-motion regulatory train wreck? Let’s just be honest with ourselves, the entire plan smells like a disaster in the making. And I’m not merely referring to the risk of bland chicken and uncomfortable chit-chat.

Is This Even Legal, Seriously?

The first question that leaps to mind is this all above board? We’re discussing a meme coin, NFTs and a former president. That's a cocktail of potential regulatory nightmares.

Think about it. Securities laws are already opaque enough when it comes to crypto. Are these NFTs being marketed as investments? If so, they might be just as simple to bring within the jurisdiction of the SEC. And don’t forget about AML – Anti-Money Laundering regulations. Do they have appropriate KYC (Know Your Customer) procedures? Or instead, is this just a free-for-all for bad actors to launder money?

Remember those "Trump Digital Trading Cards"? They were a hit initially. Success doesn't equate to legality. Besides the Twitter-spreading Ofac violations, the SEC has been coming for celebrity endorsers of crypto projects, one after another. Even Kim Kardashian had to pay a $1.26 million fine for improperly promoting a crypto asset. Unfortunately, she neglected to disclose that she was paid for the promotion. Could Trump be next?

And as for consumer protection — don’t get me started. These meme coins and NFTs are highly speculative vehicles. Individuals are full of speculation and hype, and they’re throwing their money into digital assets. They usually don’t understand the dangers. If this all goes wrong, who is going to be accountable? The TRUMP meme coin team? Good luck with that. Trump himself? Maybe. But that would be a legal circus.

Value Dilution: The Art of the Steal?

Trump's previous NFT ventures already raised eyebrows. Remember how quickly those new collections dropped? Boom, boom, boom. Above all else, it felt like a cash grab, pure and simple. That's the definition of value dilution, folks. When you pump out more and more of something, the value of each individual piece goes down. It's basic economics.

The original 45,000 NFT mint brought in about 648 ETH (about $785k at the time). The overall trading volume totaled 17,167 ETH (tens of millions of USD), but then… poof. Trading volume dropped to just $2,000. That’s a cliff dive!

This dinner, and the rumors of a new NFT drop to come, seems like more of the same. Suck the Trump name dry, come what may for any equity investors. It's a pattern, and frankly, it's insulting.

Unintended Consequences: Crypto's New Normal?

This entire dog-and-pony show may be the most dangerous precedent of all. If a former president can get away with the celebrity-backed crypto promotion, what’s to stop other celebrities from doing the same? Their clout would ensure a wave of other promotions follow suit. Now, picture that world inundated with meme coins and NFTs backed by every antifa, woke, limpwrist celebrity. It's a recipe for financial chaos.

  • Increased regulatory scrutiny: This event could be the catalyst for stricter regulations across the entire crypto space. Regulators are already wary of celebrity endorsements and the lack of investor protection. This could push them over the edge, leading to more aggressive enforcement and tighter rules.
  • Erosion of trust: When people get burned by celebrity-backed crypto projects, it damages the reputation of the entire industry. It reinforces the perception that crypto is a scam, making it harder for legitimate projects to gain traction.
  • Financial ruin for everyday investors: Let's not forget the real victims here: the everyday investors who are lured in by the hype and end up losing their hard-earned money. These are often people who can least afford to take the risk.

Ultimately, the Trump NFT dinner feels like a microcosm of everything that's wrong with the crypto space: hype over substance, greed over responsibility, and a blatant disregard for the potential consequences. First it’s a disaster for the industry and not just for Trump. And frankly, it's time someone said it.