Crypto Scam: Donald Trump Called Cryptocurrency “a Disaster Waiting to Happen”

Back in 2021, Donald Trump called cryptocurrency “a disaster waiting to happen” and a “scam.” Takes one to know one, right?

Donald Trump's administration has been open about its enthusiasm for cryptocurrency. Last year, as Trump campaigned for a second term in the White House, he was a vocal critic of Bitcoin and other digital currencies.

Donald Trump's administration has been open about its enthusiasm for cryptocurrency. Last year, as Trump campaigned for a second term in the White House, he was a vocal critic of Bitcoin and other digital currencies.

"It’s a disaster waiting to happen. Set up by hedge funds, and other pişies, to fleece money from the fools who pour in. A total scam!" Trump wrote in a post on his Truth Social platform.

However, Trump may have changed his mind about the “scam” as a result of the millions of dollars that flowed into his campaign coffers from industry donors. To the delight of these donors, Trump promised to make the United States the cryptocurrency capital of the world. He also talked about creating a strategic reserve of Bitcoin.

After he won the election, Trump received over $11 million in contributions to his inaugural committee from the crypto industry. It’s a hallmark of pyramid scams that only the people at the very top reap the benefits, and Trump has put himself at the very apex of the ziggurat in order to rake in millions for his posse and for himself.

Consider the saga of $TRUMP.

Three days before his inauguration, the $TRUMP meme coin debuted. Meme coins are usually based on an Internet meme and are “typically characterized by their volatile nature.” Well, that sounds like a good fit for Trump! Indeed, after he promoted the coin on his social media accounts, its value surged astronomically.

Some of the biggest winners in this naked money grab were the firms that launched the coin and profited from the transaction fees, which netted them as much as $100 million in the first two weeks. One of those firms was CIC Digital, which is owned by…Trump himself.

Like all financial operations characterized by irrational exuberance, the value of $TRUMP soon plummeted. Indeed, over 800,000 investor accounts lost a total of $2 billion. Of course, they’re not the only Trump supporters who are suffering from buyer’s remorse. Even the stock market, which initially cheered Trump’s election, is having a serious hangover, a swing in mood not very different from $TRUMP’s trajectory.

$TRUMP’s deep dive notwithstanding—or perhaps because of the success of this scam—crypto remains an essential part of Trump's economic plans. And Trump is not the only far-right leader who has dabbled in scamming the population with crypto. Argentina’s Javier Milei is now dealing with the aftermath of a corruption scandal associated with $LIBRA, a meme coin he initially supported and which left 10,000 investors over $250 million poorer. El Salvador is still reeling from Nayib Bukele’s crypto obsession, which cost his country $60 million when Bitcoin tanked a couple years ago—not to mention all the Salvadoran energy and natural resources that Bitcoin mining has absorbed.

Two years ago, I explained how cryptocurrencies function like pyramid scams. Last year, I discussed the environmental consequences of crypto.

Now I want to dig a little deeper into the politics of crypto: how Trump and his far-right allies are using these digital currencies as a strategy to rig the rules of the game in their favor.

The Mechanisms of Theft

To understand how crypto scams work, you need to know about “sniping” and “rug-pulling.”

When a new crypto product is launched, whether it’s a meme coin or a non-fungible token, a select group of speculators place a big buy to push the value higher. If enough of these “snipers” exit at the same time, the value drops, providing the snipers with short-term profits and leaving a lot of other investors holding the (empty) bag.

Of course, it helps to know in advance about a new product launch so that you can line up your bots and your AI to execute high-volume and high-speed trades—and your coordinated exit from the stage. In another context, you might call this “insider trading.”

The orchestrated sale of the crypto product is known as the “rug pull.” It can be sudden, as was the case with $TRUMP. Or it can take place over a longer period of time in what used to be known as the “long con.”

The rug pull sometimes relies on the services of a celebrity. Let’s take a brief look at the case of Javier Milei in Argentina to understand how this works.

Enter Milei

Argentine President Javier Milei is, to say the least, a heterodox economist. He pledged to cut government spending as a way of reining in inflation. He fired 30,000 government workers, eliminated government subsidies, and halted many public works projects. No surprise that Milei and his infamous chainsaw served as the inspiration for Musk and DOGE.

Inflation in Argentina has indeed fallen, from nearly 300 percent to around 8