Trump’s growing crypto and media empire creates potential business conflicts

Not long after buying and publicly consuming a $6.2m banana as part of an artworld stunt, Chinese crypto entrepreneur Justin Sun made another eye-catching purchase, investing $30m ($23.5m) into a cryptocurrency firm called World Liberty Financial.

The company had foundered since its October launch, investors seemingly leery of its prospects and its terms.

But it boasted a potentially enticing feature: the chance to do business with a firm partnering with and promoted by none other than Donald Trump.

Mr Sun’s investment tipped the company over the threshold that allowed the president-elect to begin profiting from the venture. Trump and his family are now in the position to collect roughly $20m – and potentially far more.

Mr Sun, who is currently fighting fraud charges in the US related to his own crypto business, did not respond to questions about what prompted his interest in the tokens, which cannot be traded.

But the episode set off alarm bells among government ethics experts, who see it as an indication that Trump’s expanding business ventures have made it easier than ever for those hoping to influence US policy to steer money his way.

“The conflicts have grown substantially with the scope of his business empire,” said Richard Painter, who served as the White House’s chief ethics lawyer during the George W Bush administration.

In a statement to the BBC, Trump’s team shrugged off the worries.

In his first term, “President Trump removed himself from his multi-billion-dollar real estate empire to run for office and forewent his government salary,” Trump spokeswoman Karoline Leavitt said.

“Unlike most politicians, President Trump didn’t get into politics for profit – he’s fighting because he loves the people of this country and wants to make America great again.”

But Trump has taken little action in response to concerns about the potential for corruption, or appearance of it, as he prepares for a return to the White House.

Trump has faced questions about conflicts of interest before.

During his first term as president, the Trump International Hotel in Washington, DC became a symbol of the issue, as a go-to place for lobbyists, foreign diplomats, and allies to stay and spend.

Critics argued that the hotel created a way for Trump to profit indirectly from his office. He faced accusations and lawsuits alleging he violated the US Constitution’s ban on presidents receiving foreign emoluments – or profiting from their office.

But experts said the growth of his business empire, which now includes a publicly traded social media company, a cryptocurrency firm, and ties to a Saudi-backed golf league, makes it possible for anyone hoping to curry favour to move money more quietly and in much greater sums.

“The scale has increased and the ease has increased,” said Michael Ohlrogge, a law professor at New York University, who has studied Trump Media, which operates Truth Social and currently represents the bulk of Trump’s $6bn fortune. “You can only book so many hotel rooms.”

On Truth Social, for example, Prof Ohlrogge said a foreign government or business could purchase ads convincing investors the firm was gaining traction, prompting a pop in its share price.

Though Trump Media commands a market value of more than $7bn, there has been little sign of such activity so far. The company reported less than $5m in ad sales this year.

But given the stock market’s “amplifying” effect, Prof Ohlrogge said it would not require a lot of spending to lead to potentially significant gains for Trump, who owns more than half the shares of the company.

Nowhere is the entanglement between Trump’s business interests and his public duties as stark as in the crypto industry, where he has deepened his personal involvement, while simultaneously promising to champion it while in the White House.

His plans include regulatory rollback and ideas such as a national Bitcoin reserve, in which the government would stockpile the cryptocurrency.

“One of the most important issues to be determined over the next couple years is how crypto is regulated,” said Virginia Canter, chief ethics counsel at the nonpartisan Citizens for Responsibility and Ethics in Washington. “Well now, he’s an active player in the crypto market. How it could be regulated [could] affect his personal wealth, what kind of position he takes.”

Nik Bhatia, founder of Bitcoin Layer, a firm that advocates investments in Bitcoin, said it would be a mistake to dismiss Trump’s stance on crypto as driven only by his own financial interests.

“I don’t see these moves motivated by self-interest – I see them representing the electorate,” he said.

But still, he said: “I think there probably is a conflict of interest in that his pro-crypto stance will benefit his company.”

This week, Trump said he would nominate Paul Atkins, who has lobbied for the industry, to lead the Securities and Exchange Commission (SEC).

He is widely expected to dial back enforcement at the agency, which polices publicly traded firms such as Trump Media for issues such as fraud and insider trading. The SEC oversaw a crackdown on the crypto industry under President Joe Biden.

Mr Sun, the World Liberty Financial investor, was caught up in the SEC crackdown last year, after the agency charged him and his company with failing to properly register with the government while selling certain digital assets, among other charges.

Under new leadership, the agency could very well drop the case, said John Coffee, a professor at Columbia Law School and an expert in securities law.

“The leading characteristic of Mr Atkins is that he does not like enforcement and wants to greatly restrict the range of cases the SEC will bring,” he said.

In announcing his investment last month, Mr Sun did not mention the SEC complaint – which he has said lacks merit – but did cite Trump’s views on crypto.

“The U.S. is becoming the blockchain hub, and Bitcoin owes it to @realDonaldTrump!” he wrote on X. “TRON is committed to making America great again and leading innovation. Let’s go!”

There is little in US law that sets limits on conflict-of-interest – presidents are not bound by the same rules that regulate other government employees and cabinet officials.

Though the US Constitution in theory bars presidents from taking presents from foreign governments while in office, the Supreme Court already has dismissed two previous lawsuits from Trump’s first term involving potential conflicts of interests.

Last summer, in a case involving Trump, it also ruled that presidents have broad immunity from criminal prosecution while in office.

In the past, Trump has argued that his business was actually hurt by his time in the White House, as partners worried about controversy cut ties, and he faced investigations and lawsuits.

Now preparing to enter the White House a second time, Trump has yet to unveil an ethics plan, as is customary, and has given little sign he plans to bow to such concerns.

He has vowed to hold onto his Trump Media stake, continues to hawk Trump-branded merchandise and lend his name to ventures like World Liberty Financial. His Mar-a-Lago club remains a place where the wealthy willing to pay for membership can gain access to the president with little to no transparency.

Ethics experts worry that Trump has opened a door that will be difficult to close again.

“Trump’s got the message he can do whatever he wants, because he won,” Mr Painter said. “Future presidents are going to look at this and think, ‘We can do whatever we want.'”