Crypto Assets: From Idealism to Political Maelstrom

Editorial: Crypto Assets Have Become the Ultimate Power Asset

An industry that once dreamed of transcending politics has now become synonymous with intertwining interests.

When the Qatari government proposed replacing Air Force One with a Boeing 747, Donald Trump responded: Why not? Only a fool would refuse free money. In modern history, very few presidential terms have sparked so many conflicts of interest at such a rapid pace. However, the most concerning self-serving behavior in American politics is not happening on the runway, but on the blockchain – the home of trillions of dollars in Crypto Assets.

In the past six months, Crypto Assets have played an unprecedented role in public life in the United States. Cabinet officials have invested heavily in digital assets, and Crypto Assets enthusiasts are involved in managing regulatory agencies. The largest companies in the industry have become major donors to campaign activities, investing hundreds of millions to support friendly legislators and combat opponents. The presidential family promotes their Crypto Assets projects globally, and certain large investors in Meme coins even have the opportunity to dine with the president. The Crypto Assets held by the first family are now worth billions of dollars and may become the largest single source of their wealth.

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This contrasts sharply with the origins of Crypto Assets. When Bitcoin was born in 2009, it was welcomed by a utopian anti-authoritarian movement. Early adopters held lofty goals, hoping to completely reform the financial system and protect individuals from asset plunder and inflation. They expected to shift power from large financial institutions to small investors. This was not just an asset, but a technological liberation.

Today, it seems that all of this has been forgotten. Crypto Assets have not only given rise to large-scale fraud, money laundering, and other financial crimes, but the industry has also established a complex relationship with the U.S. government executive branch, surpassing that of Wall Street or any other industry. Crypto Assets have become the ultimate power asset.

In stark contrast to regions outside the United States. In recent years, different jurisdictions such as the EU, Japan, Singapore, Switzerland, and the UAE have provided new regulatory transparency for digital assets, without the serious conflicts of interest seen in the United States. In developing countries, government expropriation is common, inflation rates are high, and the risk of currency devaluation is severe; Crypto Assets continue to play the role that early idealists hoped for.

All of this is happening as the underlying technology of digital assets matures. Although speculation continues, mainstream financial and technology companies are gradually paying more attention to Crypto Assets. In the past 18 months, real-world assets that have been "tokenized" and traded on the blockchain (including private credit, U.S. Treasuries, and commodities) have nearly doubled. Traditional financial institutions have become significant issuers of tokenized money market funds, and Crypto companies are also involved in issuing tokens linked to assets such as gold.

Perhaps the most promising application is in the payments sector. Some companies are adopting stablecoins (digital tokens backed by traditional assets). Just in the past month, several payment giants have announced that they will allow customers and merchants to use stablecoins for payments and settlements. Fintech companies have launched stablecoin financial accounts in 101 countries and regions, and even acquired stablecoin platforms. After abandoning similar projects for three years, some large tech companies may attempt again.

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This is an opportunity that the Crypto Assets industry must seize. Supporters argue that when the last government was in power, they had no choice but to lobby as hard as they could in the U.S. Under strict regulations, many well-known companies have been involved in enforcement actions and legal cases. Financial institutions have refrained from providing services to Crypto Assets companies due to concerns, let alone venture into crypto business, especially stablecoins. From this perspective, the industry's complaints have their reasonableness. Clarifying the legal status of Crypto Assets through the courts rather than Congress is neither efficient nor always fair. Nowadays, regulatory pendulums have swung sharply in the opposite direction, and most cases against Crypto Assets companies have been dismissed.

The result is that Crypto Assets in the United States need to self-regulate. New rules must still be established to ensure that risks do not seep into the financial system. If politicians fail to properly regulate Crypto Assets out of fear of the industry's electoral influence, the long-term consequences will be detrimental. The danger of setting too few protective measures is not purely theoretical. The three largest banks that collapsed in 2023 had significant exposure to the volatile deposits of the Crypto Assets industry. Stablecoins are susceptible to runs and should be regulated like banks.

If these changes do not occur, the leaders in the Crypto Assets field will eventually regret the agreement reached in Washington. The industry has largely remained silent on the conflicts of interest arising from the Trump family's investment in Crypto Assets. The industry needs legislation to clarify its status and provide a more reasonable regulatory framework. However, the intertwining of presidential business interests with government affairs makes this more difficult. In May of this year, a Crypto Assets bill failed to pass in a procedural vote in the Senate, as several senators withdrew their support.

Pursue profit

Any industry that is so closely associated with a particular political party cannot escape the influence of the fluctuations in American voter sentiment. The industry views Trump as a savior and has become a favored "power asset," indicating that it has chosen sides. Crypto Assets play a new role in policy-making, but today, the reputation and fate of the industry are inextricably linked to the rise and fall of its political backers. Crypto Assets have always been beneficial to the Trump family, but ultimately, the benefits of this deal are likely to be one-way.

Crypto Assets industry has risen to the core of American politics

The investments of the Trump family, friendly regulators, and generous election spending have driven this change.

In late April, Fr8Tech, a logistics company in Texas valued at approximately $3 million, initiated an unusual investment. The company stated that it would borrow up to $20 million to purchase TRUMP Meme coin—a cryptocurrency launched by Trump three days before the start of his second presidential term. (He urged on social media: "Join my very special community and get your coin now.") The company managing this coin just announced that the largest investors will be invited to dinner with the president at the end of May. The CEO of Fr8Tech stated that purchasing this token would be an "effective way" to "advocate" for the trade policies they desire.

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In the same week, in Lahore, Pakistan, the night sky was illuminated by fireworks. The Pakistan Crypto Assets Committee, established by the Minister of Finance in March, is celebrating its collaboration with the World Liberty Financial Company (WLF). WLF belongs to Trump and his family and has pledged to help Pakistan develop blockchain products, convert real-world assets into digital tokens, and provide broader encryption consulting. The specific details of the agreement were not disclosed. Indian media interpreted this as Pakistan's attempt to win Trump's favor—two weeks later, when Trump attributed a ceasefire in the India-Pakistan military conflict to himself, this interpretation became even more nuanced.

These events mark a significant transformation in Washington. Crypto Assets are on the rise. The President, First Lady, and their children are promoting it both domestically and abroad. Regulators appointed by the President have taken a more lenient stance towards it. Investors are flocking in. Large lobbying groups are springing up like mushrooms after rain, supporting political candidates who advocate for Crypto Assets and punishing those who oppose. Investors and supporters, including foreign governments, find that this provides a channel to connect with key figures. This young industry suddenly finds itself at the core of American public life, but its close ties to the Trump family also make it, to some extent, a partisan endeavor. Trump's enthusiasm for Crypto Assets may ultimately do more harm than good.

Historically, many industries have been entangled with political power. Banks, arms manufacturers, and large pharmaceutical companies have long maintained influence in the corridors of power. In the late 19th century, railway companies exerted a tremendous influence on national and local politics, obtaining favorable regulations, which led to a period of prosperity followed by a depression.

But no industry has been able to leap from the fringes to official darling as quickly as Crypto Assets. At the beginning of Trump's first term, the total value of all Crypto Assets globally was less than $20 billion, and it has now exceeded $3 trillion. When Trump nominated a candidate for Chairman of the U.S. Securities and Exchange Commission in 2017, Crypto Assets were completely unmentioned at the Senate confirmation hearing. Just in 2021, he dismissed digital assets, stating that Bitcoin "looks like a scam" and "I don't like it because it's another coin competing against the dollar." The following year, his views seemed to be confirmed when digital asset prices plummeted and an $8 billion fraud case occurred at a major Crypto exchange, signaling the industry's entry into the "Crypto winter."

Regulators are also pessimistic about many crypto assets. The previous administration's SEC chairman insisted that many cryptocurrencies are actually securities and should only be traded on regulated exchanges. The agency subsequently sued several large crypto trading platforms and many other digital asset companies.

However, since Trump returned to the White House, financial regulatory agencies that once tried to curb Crypto Assets have suddenly become eager to support them. This is because Trump appointed staunch supporters to lead them. The new SEC chairman served as co-chairman of a Crypto Assets industry organization for eight years. The chairman of the Commodity Futures Trading Commission (another financial regulatory agency) nominated by Trump was previously the head of crypto policy at a prominent venture capital firm.

The changes in the leadership of the US SEC have led to a significant policy shift. It now has a much narrower view on which crypto assets qualify as securities and thus need to be regulated. Officials in the newly formed crypto task force of the committee are affectionately referred to in the industry as "crypto mom." Since Trump took office, more than ten enforcement actions against crypto companies have been halted, including actions against large exchanges and well-known crypto asset issuers. This has naturally boosted industry confidence: venture capital funds invested nearly $5 billion in crypto companies in the first three months of 2025, setting a new high in nearly three years.

It is not uncommon for there to be a significant shift in regulatory policy when a new president takes office and appoints like-minded officials. When a Republican government replaces a Democratic government, policies often shift from intervention to deregulation. However, it is unusual for the president and their family to be deeply involved in industries that benefit from deregulation.

A few months ago, the President's family's investment in the Crypto Assets sector has been growing rapidly. The WLF company, of which the Trump family holds 60% of the shares, was established in September 2024 and announced in March 2025 the launch of a new stablecoin ( typically pegged to the US dollar, a Crypto Asset ). This token, named USD1, has a market value of over $2 billion, making it one of the largest US dollar-pegged Crypto Assets in the world.

Trump's main foreign policy advisor is the "honorary co-founder" of WLF; his son is a "co-founder." Trump himself is the "chief encryption advocate." A footnote on the website warns: "Any mention, citation, or image related to Trump or his family members should not be construed as an endorsement." A spokesperson stated that WLF is a private company with no political background, and no one from the Trump administration is on its management team.

In addition to WLF, Trump also owns other Crypto Assets. There is also a Meme coin whose value skyrocketed after its launch on January 17, reaching a market cap of about $15 billion at its peak, before subsequently plummeting. Companies associated with the Trump family own 80% of these tokens. The First Lady launched another Meme coin on January 19, which also experienced a surge in value before crashing.

The president also has direct financial interests in the encryption field through his social media company, in which he owns 52% of the shares. In April this year, the company announced a partnership with an exchange that recently had its regulatory case withdrawn to sell an exchange-traded fund involving digital assets and other securities (ETF). The company also stated that it is considering launching its own crypto wallet and coin.

The volatility of these assets and the uncertainty of ownership make it difficult to accurately calculate how much wealth the Trump family has tied up in these investments. Crypto Assets may now constitute the family's largest single business line. The Meme coins held by the family alone are valued at nearly $2 billion, which is comparable to the total value of all their real estate, golf courses, and clubs.

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Not only did the Trump family help revitalize Crypto Assets, but large election lobbying groups have also been investing heavily to promote the interests of the industry. Several networks of affiliated lobbying organizations spent over $130 million in the run-up to last year's elections, making it one of the highest spending groups in the campaign. With $260 million in revenue from the previous election cycle, one of them is not only the largest lobbying organization advocating for a specific industry but also the largest nonpartisan organization of all types. In contrast, the National Association of Realtors raised about $20 million. Several well-known Crypto Assets companies and venture capital tycoons are major donors.

These organizations do not emphasize candidates' views on Crypto Assets, but instead target any issues that may enhance the favor of politicians they support or hinder those they oppose with advertising. They once used an advertisement to criticize a Democratic congresswoman, helping her lose in the Senate primary; another advertisement praised a congressman for his tough stance on crime. "Many industries have tried this approach. The difference lies in its singular focus, which is what truly changes the game," said a spokesperson for the organization. "The basic strategy is: support supporters, oppose opponents."

"This is the most blatant display of money and power I have ever seen in a legislative body," said an executive from a financial regulatory advocacy organization, who previously served on the team of the SEC chair during the last administration. These organizations also have significant funds ready to deploy in the midterm elections in 2026.

The intimidating "war fund" in the encryption industry should help persuade Congress to adopt its preferred policies. Most importantly, it hopes Congress will clarify the legal status of crypto assets to prevent regulatory policies from swinging dramatically again in future elections. After all, presidents and their appointed officials come and go; legislation tends to be more enduring.

The preference of the encryption industry is to define most Crypto Assets as commodities, regulated by the Commodity Futures Trading Commission (CFTC), rather than as securities regulated by the SEC. The CFTC is responsible for regulating most financial derivatives trading and is a much smaller agency compared to the two regulatory bodies. For this fiscal year, it has requested a budget of $399 million and has 725 full-time employees, while the SEC's budget is $2.6 billion with 5,073 employees. The encryption industry views this as a more lenient regulatory approach.

A bill that would make the CFTC the primary regulatory agency for Crypto Assets was stalled in Congress last year. However, Republicans, who lean towards more lenient financial regulations, have controlled both chambers since January. More importantly, many Democrats also recognize the necessity of placing Crypto Assets on a clearer legal footing. However, the Trump family's enthusiasm for encryption is making it harder for the industry to gain sufficient support in Congress.

Trump's obvious conflict of interest has sparked criticism from Democratic lawmakers. They believe that many investors do business with the Trump family or purchase related Crypto Assets merely to curry favor with the president—essentially accusing Trump of using his power for personal gain. For example, after announcing a dinner with Trump for major investors, the price of related Meme coins surged. Another controversy involves a foreign government investment company deciding to use WLF's USD1 as a vehicle for investing $2 billion in a trading platform. Using Crypto Assets to fund such a large-scale investment is unusual in itself, and the business logic of using a brand new and untested Crypto Asset is even less clear. However, WLF has benefited immensely from this: the deal propelled USD1 from obscurity to become the seventh largest stablecoin in the world.

In May of this year, a bipartisan bill to create a clear regulatory framework for stablecoins failed to gain Senate approval. The bill's advocates were confident about its passage, but previously supportive Democrats began to express concerns that it could enable what they perceive as the president's abuse of power for personal gain. Two Democratic senators introduced a bill aimed at preventing the president, members of Congress, and senior White House officials from issuing, sponsoring, or endorsing Crypto Assets. Even Republican senators, who have consistently advocated for clear regulation of Crypto Assets, stated that Trump's Meme coin dinner "gave me pause."

Concerns about regulation of Crypto Assets are not limited to the connections between the president and the industry. One scholar suggests that a rapidly growing Crypto industry regulated by small agencies may pose risks to financial stability. He points out that Crypto Assets were a core factor in the 2023 banking crisis in the United States. The banks where the crisis initially erupted had substantial business dealings with Crypto companies and investors, thus suffering severely from the Crypto winter. When concerns about their losses evolved into a bank run, panic quickly spread to the broader financial system. Critics argue that normalizing the use of unstable Crypto Assets will inevitably inject greater risks into the financial system. Another Democratic senator stated that the stablecoin bill would increase the risk of financial collapse.

In public, Crypto Assets advocates remain optimistic about gaining supportive legislation. However, privately, some industry leaders are critically harsh about the president's Crypto adventure. They worry that the industry becoming a facade for the president's personal gain will make it difficult for lawmakers to support favorable bills. One well-known investor, who is also a supporter of Trump, is among the few willing to publicly state that the economic interests of the president's family in the Crypto Assets industry are making friendly legislation harder to pass. "When I mentioned this, government officials contacted me and expressed their dissatisfaction. But trying to silence those who state the facts will not work. Conflicts of interest do exist, and no one can truly dispute that."