Warren and Blumenthal Demand SEC Investigation into Trump's Memecoin

President-elect Donald Trump's memecoin briefly exploded in value after its launch in January 2025, but eventually crashed, leaving nearly a million investors with losses. According to crypto analytics firm Nansen, those who bought in at the top of the market are staring at steep losses of approximately 97%. The total loss for investors is estimated to be $3.8 billion by the end of June.

Democratic Senators Elizabeth Warren and Richard Blumenthal have called on the SEC to investigate Trump's memecoin, suggesting it may constitute an 'illegal scam'. In a letter to SEC Chair Paul Atkins, they expressed concern that the token could be a 'soft rug pull', where support is pulled gradually. The lawmakers argued that this would allow developers to profit while leaving retail buyers with significant losses.

TRM Labs, a blockchain intelligence company, analyzed the memecoin in January 2025 and concluded it was not set up as a rug pull. However, Ari Redbord, global head of policy at TRM Labs, noted that the token's concentration in a small number of hands and gradual price erosion raise questions about its legitimacy.