Clarity Act stalls as Warren asks SEC to investigate Trump memecoin

Senators Elizabeth Warren and Richard Blumenthal asked the U.S. Securities and Exchange Commission to probe President Donald Trump’s token.

As the crypto Clarity Act moves through a high-stakes countdown, Democratic U.S. Senators Elizabeth Warren and Richard Blumenthal have urged the U.S. Securities and Exchange Commission to investigate President Donald Trump’s memecoin.

Although the SEC has said memecoin oversight is generally outside its remit, the senators argued the agency has a duty to examine the billions of dollars in losses tied to $TRUMP investors.

Warren and Blumenthal sent the request to SEC Chairman Paul Atkins, Trump’s appointee, asking the agency to probe the estimated $3.8 billion in losses suffered by nearly a million $TRUMP investors. The lawmakers also cited the president’s recent financial disclosure, which indicated that he had made $636 million from the token.

“While all cryptocurrency trading involves risk, such a stark asymmetry raises questions about how the president made his cryptocurrency fortune, including through potentially fraudulent enrichment schemes with implications for market integrity and stability — not to mention the financial well-being of nearly a million American investors,” the senators wrote in a letter dated Monday.

The $TRUMP coin reached more than $46 at its peak before falling steadily to its current price of $1.47. The token saw brief jumps in value after the company behind it announced plans to host dinners, including one at Trump’s Mar-a-Lago with the president as keynote speaker, but those gains were short-lived on both occasions.

The letter is likely to add political pressure more than regulatory consequence, arriving as negotiators trying to complete the Digital Asset Market Clarity Act await the White House’s response to the latest revision of a disputed ethics provision. That section would bar senior government officials from direct involvement in crypto projects, underscoring how the debate over Trump’s token has become entangled with broader efforts to set rules for the industry.

The SEC has already taken the position that memecoins generally fall outside its jurisdiction. In one of the agency’s early crypto staff statements after the Trump administration took office, it said memecoins have “limited or no use or functionality” and do not qualify as securities under the law.

The ability of a government official, including President Trump, to issue such a token has become a central issue in negotiations over the Clarity Act’s ethics language. Trump recently agreed to be subject to a limit, but the restrictions he accepted would have only narrow practical effect. Democrats rejected that approach and said they would oppose the legislation unless the provision was strengthened, prompting Senators Thom Tillis, a Republican, and Ruben Gallego, a Democrat, to negotiate a tougher version.

The revised language was sent to the White House last week, but the administration had not responded days later. White House spokespeople did not immediately answer CoinDesk’s questions about the administration’s position.

If negotiators cannot quickly reach a new agreement that can win support from as many as 10 Democrats, Senate Majority Leader John Thune’s plan to begin the Senate voting process for the Clarity Act this week could end in defeat. That makes the ethics dispute more than a side issue: it is part of whether the bill can advance at all.

Warren, a Massachusetts Democrat and the top minority-party member of the Senate Banking Committee, has not been part of the Clarity Act negotiations, though she has consistently opposed the bill. If Democrats gain seats in this year’s midterm congressional elections and return to the Senate majority, Warren would likely lead the banking committee, which oversees the SEC and plays a major role in most crypto legislation.

“The SEC must be willing to enforce the law even when potential wrongdoers include those with powerful political connections,” Warren and Blumenthal wrote in the letter.