Within 24 hours of Donald Trump’s official token (TRUMP) reaching a market cap of $15 billion, Melania Trump has introduced her own meme coin, MELANIA.
The rapid launch of the digital asset has drawn widespread attention and sparked debate, especially over the timing of the launch and the larger implications. Coinage founder Zack Guzmán stressed the strategic importance of the move.
In his tweet, Guzmán noted that there was a compelling reason why the Trump couple launched TRUMP and now MELANIA so quickly before the inauguration. Guzmán explained the potential constitutional challenges, specifically the Emoluments Clause, which prohibits a President from using his office for personal financial gain.
Donald and Melania Trump have been exploring digital assets for years, using separate companies and teams to create NFTs. According to Trump’s public tax filings, he earned $7.2 million through an NFT deal with CIC Digital, while Melania earned more than $330,000 from a similar deal. By launching their token before Trump could potentially return to the presidency, the couple appears to be trying to avoid direct accusations of using their office for personal gain.
While the TRUMP token has managed to raise billions in liquidity, its launch has been hailed as a bold experiment that aligns with Trump’s political persona. However, a recent analysis from Web3’s financial management platform, FinTAX, states that the move carries significant legal, tax, and political risks.
First, TRUMP’s legal classification has been a critical concern. In the US, cryptocurrencies issued through Initial Coin Offerings (ICOs) are often classified as securities and are subject to strict regulation by the Securities and Exchange Commission (SEC). The SEC uses the Howey Test, which considers financial investment, expected profits, and reliance on third-party efforts, to determine whether an asset qualifies as a security.
Tax compliance adds another layer of complexity. The IRS taxes crypto profits, and with the Trump team holding 80% of TRUMP, that will be unlocked within three years. Capital gains taxes will be charged when the asset is sold or exchanged, making timing, cost basis calculations, and detailed records essential for compliance. FinTAX also highlights that high price volatility adds to the complexity of tax filing.
Political concerns are also a major issue. The Federal Election Commission (FEC) enforces political contribution rules, which could pose problems if TRUMP is used to circumvent transparency or contribution limits. While there is no direct evidence of such abuse, this move could disrupt US political finance norms and spark allegations of corruption. Furthermore, a significant decline in TRUMP's value could damage Trump's political reputation.
