Crypto Assets: From Utopian Dreams to Political Maelstrom

Editorial: Crypto Assets have become the core focus of financial politics

An industry that once dreamed of transcending politics is now deeply entangled in a vortex of power and interests.

When the Qatari government proposed to replace Air Force One with a Boeing 747, President Trump readily responded: Why not? Only a fool would refuse free money. In modern history, few presidential terms have triggered so many conflicts of interest so quickly. However, the most noteworthy acts of self-interest in American politics are not occurring on the runway, but on the blockchain—a habitat for trillions of dollars in Crypto Assets.

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In the past six months, Crypto Assets have played an unprecedented role in public life in the United States. Cabinet officials have invested huge amounts of money in digital assets, crypto enthusiasts are involved in the management of regulatory agencies, industry giants have become major funders of election campaigns, and exchanges and issuers have invested hundreds of millions of dollars to support friendly lawmakers and combat opponents. The presidential family promotes its encryption investment globally, major investors are given the opportunity to dine with the president, and the encryption assets held by the first family are worth billions of dollars, possibly becoming the largest single source of their wealth.

This stands in ironic contrast to the origins of Crypto Assets. When Bitcoin was born in 2009, it was welcomed by a utopian anti-authoritarian movement. Early adopters, driven by noble goals, hoped to completely reform the financial system, protect individuals from asset plunder and inflation, and transfer power to small investors. This was not just an asset, but a technological liberation movement.

These ideals have now been forgotten. Crypto Assets not only fueled large-scale fraud, money laundering, and other financial crimes, but the industry has also formed an unprecedented close relationship with the U.S. government executive branch, more so than Wall Street or any other industry. Crypto Assets have become a typical asset intertwined with power.

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This stands in stark contrast to regions outside the United States. In recent years, areas such as the European Union, Japan, Singapore, Switzerland, and the United Arab Emirates have successfully established regulatory transparency for digital assets while avoiding the conflicts of interest seen in the United States. In developing countries, where government expropriation and inflation risks are higher, Crypto Assets continue to play the role envisioned by early idealists.

At the same time, the underlying technology of digital assets is gradually maturing. Mainstream financial and technology companies are beginning to pay attention to Crypto Assets, and the number of real-world assets being "tokenized" and traded on the blockchain has nearly doubled in the past 18 months. Traditional financial institutions like BlackRock and Franklin Templeton are actively participating in the issuance of tokenized money market funds, and Crypto companies are also launching tokens linked to assets like gold.

The payment sector may be the most promising application scenario. Recently, Mastercard announced that it would allow customers and merchants to use stablecoins for payments and settlements, while fintech company Stripe launched stablecoin financial accounts in 101 countries and acquired the stablecoin platform Bridge. Three years after abandoning the Diem project, Meta may attempt to enter this field again.

Crypto companies are facing risks while also seizing opportunities. Supporters argue that during the Biden administration, they had no choice but to do everything they could to protect themselves in the United States. At that time, the SEC held a pessimistic view of the industry, dragging many well-known companies into enforcement actions and legal lawsuits, and banks were reluctant to provide services to crypto companies out of concern. Clarifying the legal status of crypto assets through the courts rather than Congress is both inefficient and not always fair. Now, the regulatory attitude has swung to the other extreme, with most cases against crypto companies being dismissed.

Therefore, the crypto industry in the United States needs to reinvent itself. New rules are still needed to ensure that risks do not seep into the financial system. If politicians cannot properly regulate Crypto Assets due to fear of the industry's electoral influence, the long-term consequences will be very harmful. The three major banks that failed in 2023—SilverGate, Signature, and Silicon Valley Bank—had significant exposure to the volatile deposits of the crypto industry. Stablecoins are susceptible to runs and should be regulated like banks.

Without these changes, the leaders in the Crypto Assets field will ultimately regret the agreement reached in Washington. The industry largely remains silent on the conflict of interest arising from the president's family's Crypto Assets investments. The industry needs legislation to clarify its position and provide rational regulatory guarantees, but the intertwining of the president's business interests with government affairs makes this more difficult. In May of this year, a Crypto Assets bill failed to pass a procedural vote in the Senate as several senators withdrew their support.

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Industries that are so closely associated with a certain political party cannot avoid the impact of voter sentiment fluctuations. This industry views Trump as a savior and has become a favored political asset, indicating that it has taken sides. Crypto Assets play a new role in policy-making, but today, the industry's reputation and fate are closely tied to its political allies. In the long run, this one-sided trading may not be beneficial for the industry.

Crypto Assets industry has quickly become the core of American politics

Thanks to investments from the presidential family, friendly regulators, and generous election spending, the Crypto Assets industry is undergoing unprecedented transformation.

In late April, Fr8Tech, a logistics company in Texas valued at approximately $3 million, announced it would borrow up to $20 million to purchase a crypto asset — the Meme coin launched by Trump three days before he began his second term. The company managing the coin just announced that the largest investors would be invited to dinner with the president. The CEO of Fr8Tech stated that purchasing this token would be an "effective way" to "advocate" for the trade policies the company hopes for.

In the same week, in Lahore, Pakistan, the night sky was illuminated by fireworks, celebrating the establishment of the country's Ministry of Finance's Crypto Assets committee, which formed a partnership with a company belonging to Trump and his family - World Liberty Finance Company ( WLF ). WLF promised to assist Pakistan in developing blockchain products, converting real assets into digital tokens, and providing consulting services. The specific details of the agreement were not disclosed, but Indian media interpreted this as Pakistan trying to win Trump's favor - this interpretation became more awkward two weeks later when Trump credited himself for the ceasefire in the India-Pakistan military conflict.

These events signify that change is happening in Washington. Crypto Assets are on the rise, with the president and his family promoting them both domestically and internationally, regulators appointed by the president taking a lenient stance, investors flocking in, and major pressure groups supporting political candidates that advocate for Crypto Assets while punishing opponents. Investors and supporters, including foreign governments, find that this provides a pathway to access high-level connections. This young industry suddenly finds itself at the core of American public life, but its close association with the president's family has also turned it into a partisan endeavor to some extent.

For many years, numerous industries have been entangled with the political class. Banks, arms manufacturers, and large pharmaceutical companies have long maintained influence in the corridors of power. In the late 19th century, railroad companies exerted significant influence on politics, obtaining favorable regulations that contributed to prosperity and the subsequent disastrous depression.

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However, no industry has been able to leap from the fringes to become an official darling like Crypto Assets. At the beginning of Trump's first term, the total global value of Crypto Assets was less than $20 billion, and it has now surpassed $3 trillion. During the 2017 SEC chairman nomination hearing, Crypto Assets were not even mentioned. Until 2021, Trump still scorned digital assets, calling Bitcoin "looks like a scam" and "doesn't like it because it competes with the dollar." The following year, the plunge in Crypto Asset prices and the $8 billion fraud case involving the FTX exchange seemed to confirm this viewpoint.

Regulators are also pessimistic about many crypto assets. The SEC chairman under the Biden administration insists that many cryptocurrencies are actually securities and should be traded on regulated exchanges, and has sued several large trading platforms and digital asset companies.

However, after Trump returned to the White House, those regulatory agencies that had tried to curb Crypto Assets suddenly shifted to a supportive attitude. The new SEC chairman had served as co-chairman of the encryption industry organization for eight years, and the nominee for chairman of the Commodity Futures Trading Commission was previously the head of encryption policy at the venture capital firm a16z.

Leadership changes have led to significant policy shifts. The SEC now takes a narrow view on which crypto assets qualify as securities and fall under regulatory oversight. Since Trump took office, more than a dozen enforcement actions against crypto companies have been halted, including actions against two major exchanges, a leading crypto assets issuer, and the first crypto company to obtain a state banking license. These have boosted industry confidence: venture capital invested nearly $5 billion in crypto companies in the first three months of 2025, reaching a three-year high.

Government changes leading to a shift in regulation are not uncommon, but it is unusual for the president and their family to be deeply involved in industries benefiting from regulatory loosening. The president's family's investments in the Crypto Assets space are on the rise. The WLF company, in which the Trump family holds a 60% stake, was established last September and launched a stablecoin named USD1 in March of this year, with a market capitalization exceeding $2 billion, making it one of the largest dollar-pegged Crypto Assets in the world.

Trump's primary foreign policy advisor is the "honorary co-founder" of WLF, whose son is a "co-founder", the president himself is the "chief encryption advocate", and his children are also part of the "team". The website's footer warns that any mention of Trump or his family should not be interpreted as an endorsement. A spokesperson stated that WLF is a private enterprise with no political background, and no one from the government holds a position in its management.

Apart from WLF, Trump also has other Crypto Assets. The TRUMP Meme coin once reached a market value peak of about $15 billion after its launch, but then fell sharply, with companies related to the Trump family holding 80% of these tokens. The First Lady also launched her own Meme coin this January, which similarly experienced a rise followed by a crash.

The president also holds 52% of shares in Trump Media & Technology Group (, which has direct financial interests in the crypto assets field. In April of this year, the company announced a partnership with a trading platform to sell exchange-traded funds involving digital assets ) ETF (, and is considering launching its own encryption wallet and coin.

The volatility and uncertainty of ownership of these assets make it difficult to accurately assess how much of the Trump family's wealth is tied to these investments. Cryptocurrencies may have made up the family's largest single line of business, with nearly $2 billion worth of meme coins held by the family alone, equivalent to all of its properties, golf courses, and clubs combined.

Large election pressure groups are also strongly supporting Crypto Assets. Several associated networks of super political action committees spent over $130 million in the lead-up to last year's elections, making them one of the highest spending groups in the campaign. One of these PACs raised $260 million in the last election cycle, becoming the largest PAC advocating for a specific industry and the largest nonpartisan super PAC of all types. The main trading platform is the PAC's largest corporate donor, while venture capital firm partners are the largest individual donors.

These organizations do not emphasize candidates' positions on Crypto Assets, but rather target various issues that may boost their favored politicians or hinder those they dislike with advertisements. An executive from a financial regulatory advocacy organization described this as "the most blatant display of money and power in the legislature." One PAC alone has $116 million in cash, ready to use in the 2026 midterm elections.

The "war fund" of the crypto industry should help persuade Congress to adopt favorable policies. Most importantly, the industry hopes Congress will clarify the legal status of crypto assets to prevent regulatory attitudes from shifting again in future elections. The industry prefers to classify most cryptocurrencies as commodities, regulated by the smaller Commodity Futures Trading Commission )CFTC( rather than as securities regulated by the SEC. The CFTC's budget and personnel size are much smaller than those of the SEC, which is seen as a more lenient regulatory approach.

A bill that would make the CFTC the primary regulator for Crypto Assets was stalled in Congress last year. But now with the Republicans controlling both chambers and many Democrats recognizing the benefits of placing crypto assets on a clearer legal foundation, the situation has changed. However, the President's family's enthusiasm for encryption is making it harder for the industry to gain sufficient support in Congress.

The apparent conflict of interest of the president has sparked criticism from Democratic lawmakers. They accuse many investors of doing business with the Trump family or buying related Crypto Assets just to curry favor with the president, essentially accusing Trump of peddling power. For example, after announcing a dinner with the president for major investors, the price of related Meme coins skyrocketed. Another controversy involves the Abu Dhabi government investment company using WLF's USD1 as a tool to invest $2 billion in a certain trading platform, which is not commercially logical but very beneficial for WLF.

In May of this year, a bipartisan bill aimed at creating a clear regulatory framework for stablecoins failed to gain Senate approval. Several Democratic lawmakers introduced the bill, which aims to prevent the president, congressional members, and senior White House officials from issuing, sponsoring, or endorsing crypto assets. Even Republican senators, who have been actively advocating for clear cryptocurrency regulation, expressed "hesitation" regarding the president's Meme coin dinner.

Concerns over regulation of Crypto Assets are not limited to the president's connections to the industry. Financial experts believe that a rapidly growing Crypto industry regulated by small agencies that adhere to non-interference could pose risks to financial stability. Crypto Assets have been identified as a core factor in the 2023 banking crisis in the United States, which began with several banks that had extensive business dealings with Crypto companies. A Democratic senator stated that the stablecoin bill would increase the risk of financial collapse.

In public, Crypto Assets advocates remain optimistic, believing that the industry will gain supportive legislation. However, privately, some industry leaders criticize the president's encryption ventures, fearing that the industry being viewed as a tool for the president to sell influence will make legislation harder to pass. A prominent investor admitted that after he publicly discussed the matter, individuals from the Trump administration contacted him expressing discontent. "The conflict is real," he said, "and no one can truly dispute that."