U.S. Senators Elizabeth Warren and Richard Blumenthal have asked the Securities and Exchange Commission to investigate the TRUMP memecoin for possible fraud.

In an Aug. 3 letter addressed to SEC Chair Paul Atkins, the two Democrats cited blockchain analysis showing that nearly one million wallets had lost a combined $3.8 billion after buying President Donald Trump’s coin. They contrasted those losses with income tied to Trump’s crypto ventures and said the disparity warranted scrutiny for possible fraud, market manipulation and conflicts of interest.

Senators Raise Concerns Over Possible Rug Pull

The letter said TRUMP memecoin launched in January 2025, shortly before Trump’s inauguration, and noted that Trump posted in support of the crypto token. According to the senators, the president benefited from the token’s price movements through trading fees and repeatedly urged his supporters to trade it.

Citing prior analyses from the New York Times, Yahoo Finance and other publications, the senators also said early buyers, who were likely insiders, made millions while everyday investors lost money. Their request comes as memecoin markets continue to draw attention from regulators and lawmakers because the tokens often trade on social-media promotion and thin liquidity rather than traditional disclosure standards.

Warren and Blumenthal suggested the TRUMP memecoin may have been a rug pull, pointing to the token’s decline after its early highs. After initially rising to $75, the TRUMP memecoin has since fallen to $1.47, even with less than 30% of its supply in circulation.

The senators said the SEC should investigate further and noted that the agency brought an enforcement action in 2025 against a person accused of running an alleged rug-pull scheme.

The request is unlikely to lead to more than political pressure on Trump. The SEC issued guidance on memecoins in 2025, saying those tokens are not securities.

CLARITY Act Negotiations Remain Stalled

The letter came as Senate negotiations over the Digital Asset Market Clarity Act remained stalled.

The Senate Banking Committee advanced H.R. 3633 in May after a bipartisan markup. The bill would divide oversight of digital assets between the SEC and the Commodity Futures Trading Commission.

Ethics provisions covering senior government officials, including the president, have become a central obstacle in the Senate debate.

A July draft would restrict some crypto transactions involving the president and other senior officials. Democrats objected to temporary limits and language that would place enforcement primarily with the Justice Department. They also sought enforcement powers for state attorneys general and stronger requirements covering existing crypto holdings.

Warren said the July 22 language contained loopholes that would not prevent Trump from continuing to benefit from his crypto ventures.

Senate Majority Leader John Thune initially said the chamber would vote on the CLARITY Act before the August recess. He later acknowledged that the bill probably lacked enough time and votes to pass before lawmakers left Washington, though he still hoped to begin floor consideration before the recess.

That shift undercut the draft’s suggestion that Thune had promised an imminent decisive vote.

The legislation could return during the Senate’s September session, but election-year scheduling, banking-industry objections and unresolved ethics language could delay further action.

The SEC investigation request increased political pressure but did not establish wrongdoing by Trump or his crypto ventures. Any agency action would depend on evidence of fraud, manipulation or conduct within the SEC’s legal authority.

This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency prices remain highly volatile.

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