At a Glance
Elizabeth Warren and Richard Blumenthal urge the SEC to investigate Trump's memecoin.
Lawmakers say the project may have involved illegal fraud or unjust enrichment.
Investors who bought near the peak have lost around 97% of their money.
Research estimates almost 1 million investors lost a combined $3.8 billion.
Debate continues over whether the SEC has authority because memecoins may not qualify as securities.
The growing political fight over Trump's memecoin could increase regulatory pressure on the crypto market.
Two Democratic senators are asking the US Securities and Exchange Commission to investigate President Donald Trump's memecoin, claiming it may have operated as an illegal scam. Their request comes after the token's dramatic rise and collapse left hundreds of thousands of investors with steep losses.
KEY DETAILS
Senators Elizabeth Warren and Richard Blumenthal sent a letter to SEC Chair Paul Atkins, calling for an investigation into possible fraud or unjust enrichment linked to the $TRUMP token.
The memecoin, launched just before Trump's 2025 inauguration, briefly reached a market value of about $9 billion. Today, it is worth less than $400 million, according to CoinMarketCap, with investors who bought at the peak down roughly 97%.
Research from crypto analytics firm Nansen, cited by The New York Times, estimates that almost 1 million investors lost a combined $3.8 billion by the end of June.
While lawmakers raised concerns about a possible "soft rug pull," blockchain intelligence firm TRM Labs said the token does not show the typical signs of a classic rug pull, although it noted that a small group of early holders benefited while most later buyers suffered losses.
MARKET REACTION
The case has renewed attention on memecoins and crypto regulation, especially after the SEC stated in 2025 that memecoins are generally not considered securities, though each project can still be reviewed individually.
WHY IT MATTERS
The outcome could influence how US regulators handle future memecoin investigations and shape investor confidence across the crypto market.
The SEC has not commented on whether it will open an investigation. Traders will now watch for any regulatory response and further developments surrounding the $TRUMP token.
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Source: Yahoo Finance
Time: 03:00 PM EEST
