SEC Sought to Probe Trump's Memecoin Over Market Manipulation Fears

US President Donald Trump's Solana-based memecoin, Official Trump ($TRUMP), is facing scrutiny from US Democratic senators Elizabeth Warren and Richard Blumenthal. They have sent a formal letter to the SEC requesting an investigation into potential market manipulation and practices that could harm investors.

The letter cites concerns about the 'rug pull' risk, which refers to irreversible losses suffered by millions of investors. However, blockchain analytics firm TRM Labs stated that there is no definitive evidence that the Trump token was designed specifically for rug-pulling purposes.

TRM Labs noted that while early investors and the issuer made significant gains, numerous individual investors who bought later faced substantial losses. The company emphasized that a structure in which approximately 1 million retail investors suffered losses could become more controversial over time.