This Is Part of Trump's Great American Crypto Scam

According to Donald Trump, there's a simple reason that the United States has had to impose economy-exploding tariffs against Canada

This is part of Trump’s Great American Crypto Scam, a series about the catastrophic collision between the second Trump administration and the wild world of cryptocurrency. Read it all here.

According to Donald Trump, there’s a simple reason that the United States has had to impose economy-exploding tariffs against Canada: fentanyl. Although only a soup can’s worth of the unusually deadly synthetic opioid has been discovered by agents at the U.S.–Canada border so far this year, the president insists that a “massive” amount of the drug is being trafficked into America from the north—and that until this possibly imaginary flow of “poison” is halted, punitive measures against imports will continue.

The same, he says, goes for tariffs on Mexico. Trump’s long-standing belief is that fentanyl is smuggled into the U.S. largely by undocumented migrants, and that this flow will, accordingly, be cut off if the southern border is “secured.” His tariffs, he says, have the goal of forcing the Mexican state to take measures like deploying its national guard to intercept migrant “caravans.”

But this premise doesn’t hold up either. It’s true that fentanyl generally enters the U.S. from the south, but when law enforcement discovers the drug being smuggled, it’s almost always in the possession of American citizens attempting to cross through official ports of entry. It’s rarely found, by contrast, by border agents apprehending migrants who are attempting to enter the country undetected through the desert. And given how many of these individuals have been taken into custody in recent years—literally millions of them—we’d almost certainly know by now if they were a major vector for fentanyl trafficking.

In other words, blindsiding the Canadian aluminum industry and building a wall on the border might not be the most effective ways to reduce the amount of fentanyl that ends up inside the U.S. One that might have promise, though, is regulation and scrutiny of cryptocurrency.

Why is that? Well, the point of cryptocurrency1 is that it’s not controlled by governments or banks—the gatekeepers of the traditional financial system. Its more idealistic proponents believe that’s a good thing, because it’s not subject to manipulation by self-interested elites. Its less idealistic users realized immediately that the whole “not monitored by governments or banks” aspect makes crypto platforms a great medium for transactions that involve weapons, terrorism, stolen money, and hard drugs like fentanyl.

Various official reports and journalistic investigations have documented how the system works. Fentanyl’s “precursor” chemicals are largely manufactured in China, then shipped to Mexico, where they’re combined in laboratories controlled by cartels before being moved north. When the cartels pay their Chinese suppliers, they increasingly do so by using cryptocurrency.

Some of the crypto exchanges2 in which these transactions have been conducted, according to watchdog groups and law enforcement, include major platforms like Tron, Binance, and the infamous, now-defunct drug marketplace Silk Road. (Tron did not respond to multiple requests for comment by Slate. Binance has admitted in legal filings that it was culpable for failing to prevent illicit activity, and Silk Road founder Ross Ulbricht was convicted in 2015 of facilitating illegal commerce in federal court.)

Another thing those platforms and their proprietors have in common are connections to Donald Trump, in his roles as both the president of the United States and an active participant in the crypto business.

Trump wasn’t always a fan of crypto. As recently as 2021, he was referring to Bitcoin3, the most well-known type of cryptocurrency, as “a scam.” At the time, some elected Republicans were crypto boosters, but others were involved in bipartisan efforts to regulate the industry.

As Trump, 77, is said to have enjoyed meeting younger, hipper people, he realized that crypto was popular in the so-called manosphere of right-leaning podcasters, video-game streamers, and mixed martial arts enthusiasts through which he sought to reach Generation Z and Millennial male voters. In seeking the support of these crypto enthusiasts, he made big promises about promoting the industry. He pledged, among other things, to enshrine a “national Bitcoin reserve” and to replace Securities and Exchange Commission4 Chair Gary Gensler, who had been trying to apply the same laws to crypto companies that already apply to firms trading in conventional securities.

Trump has followed through on those promises. His pending nominee to replace Gensler, Paul Atkins, is a longtime member of a “cryptocurrency advocacy organization” called the Token Alliance. His top adviser on A.I. and crypto issues, an associate of Elon Musk’s named David Sacks, is himself a major crypto investor. And last fall, Trump and his family joined forces with a former colon-cleanse salesman named Chase Herro to launch a crypto business called World Liberty Financial5, which issues its own token (i.e., unit of cryptocurrency) called WLFI.

Thus