California Democrat Rep. Sam Liccardo, a freshman congressman who represents Silicon Valley, said he’s surprised the first piece of legislation he’s sponsoring takes aim at President Donal Trump’s meme coin.
“That wasn’t my plan when I ran for office, I can assure you,” said Liccardo, the former mayor of San Jose.
But the president’s launch of a meme coin just before taking office last month needed some kind of response, said Liccardo. Those who bought the meme coin right after launch made out, but the price quickly dropped leaving others with big losses. Even Trump-supporting crypto enthusiasts found the launch distasteful.
“That behavior is so self-evidently unethical that it raises the question why isn’t there a clear enough prohibition,” he said, adding that Trump’s meme coin raises concerns about transparency, insider trading and improper foreign influence.
The bill is set to be called the Modern Emoluments and Malfeasance Enforcement, or MEME act. According to a draft of the legislation, it would block the president, members of Congress, and other senior officials, as well as their spouses and children, from issuing or sponsoring securities, commodities and cryptocurrencies like meme coins. It would also force Trump to disgorge any profits he’s made from the sale of his meme coins.
Liccardo’s bill, which he plans to introduce Thursday, has no chance of passing in this Republican-controlled Congress. But the freshman lawmaker said it would serve as a placeholder if Democrats come to power as well an important symbolic gesture against what he called obvious corruption. His bill comes amid a fractured Democratic Partystruggling to find its footing in the early weeks of the Trump presidency.
Meme coins are a strange and highly volatile corner of the crypto industry that often start as a joke with no real value but can surge in price if enough people are willing to buy them. Critics view them as nothing more than Ponzi schemes that enrich insiders and unethical celebrities. Supporters say meme coins could be early indicators of ways in which the internet could revolutionize financial and other transactions.
Trump has long defied presidential norms when it comes to endorsing and promoting products like branded Bibles and perfume. But he’s leaned in particularly hard with cryptocurrency-related projects that could significantly boost his personal wealth.
The Trump meme coin quickly soared in price to nearly $70 shortly after it was launched but has since fallen to about $12. Researchers have estimated that trading fees have generated tens of millions of dollars for entities that launched the coin, including a company owned by Trump.
Trump and his sons also helped launch a decentralized finance cryptocurrency platform last year, and the president has backed online stores that sell crypto-themed sneakers and $100,000 watches.
The Trump family business recently released an ethics agreement that prohibits Trump from “day-to-day” decision-making involving outside business deals and limits financial information shared with him.
Once a skeptic of cryptocurrencies, Trump changed course and promised last year to make the U.S. the world capital of digital assets. The cryptocurrency industry, which felt unfairly targeted by the Biden administration, embraced Trump and spent heavily to help him win last year’s election.
First Lady Melania Trump also launched a meme coin that spiked in value around the inauguration but has since cratered. A crypto developer who said he helped launch that meme coin was also involved in a disastrous meme coin launch that’s led to Argentine President Javier Milei facing a corruption probe.
That developer, Hayden Davis, has said meme coins are essentially a rigged game that benefit a small group of people at the expense of retail investors.
“It is an insiders’ game. This is an unregulated casino,” Davis said.
Besides a criminal prohibition, Liccardo’s bill would also allow private investors who lose money on a meme coin backed by a public official to sue. Liccardo said that’s a key part of the legislation, given what he sees as a lack of independence in the current Justice Department.
“You need to have some enforcement mechanism and a private right of action helps to keep everybody honest,” Liccardo said.