Senators Elizabeth Warren and Richard Blumenthal have urged SEC Chair Paul Atkins to investigate President Trump’s $TRUMP meme coin, citing blockchain data that indicates nearly one million investors lost about $3.8 billion as the token fell 97% from its January 2025 peak.

The senators said the token may amount to an “illegal scam,” pointing to the $636 million earned by Trump-linked entities even as retail investors suffered major losses. The SEC’s response remains uncertain, particularly because memecoins are widely viewed as falling outside its jurisdiction.

Launched on January 17, 2025, just before Trump’s inauguration, the $TRUMP token once reached a market capitalization of $9 billion but now trades around $1.47, with its market cap dropping below $400 million. Trump’s reported earnings from the token have become a major obstacle for U.S. crypto regulation efforts.

WARREN DEMANDS SEC PROBE TRUMP MEMECOIN AS POSSIBLE “ILLEGAL SCAM”! Sens. Elizabeth Warren and Richard Blumenthal have written to SEC Chair Paul Atkins calling for an investigation into President Trump’s $TRUMP memecoin, per CNN. They argue the project, which peaked near $9… pic.twitter.com/MvzpeaJMKO — Crypto Banter (@crypto_banter) August 4, 2026

WARREN DEMANDS SEC PROBE TRUMP MEMECOIN AS POSSIBLE “ILLEGAL SCAM”!

Sens. Elizabeth Warren and Richard Blumenthal have written to SEC Chair Paul Atkins calling for an investigation into President Trump’s $TRUMP memecoin, per CNN.

They argue the project, which peaked near $9… pic.twitter.com/MvzpeaJMKO

— Crypto Banter (@crypto_banter) August 4, 2026

What the $3.8 Billion Loss Estimate Shows

The $3.8 billion aggregate loss figure comes from blockchain analytics cited by The New York Times and referenced directly in the senators’ letter. It reflects the combined losses of nearly one million wallets that purchased the TRUMP crypto token between its January 2025 debut and the end of June 2026.

Against that total stands the $636 million collected by Trump-linked entities, or roughly six dollars lost by retail buyers for every dollar earned by the president’s side.

Warren and Blumenthal said the structure raises concerns about possible “fraudulent enrichment schemes” tied to the $TRUMP token. Unlike ordinary investors, the president’s entities earned revenue from transaction fees on every trade, meaning their income did not depend on the token’s price direction.

The senators also pointed to the risk of a “soft rug pull,” in which founders slowly withdraw while continuing to present the project as active. Investor testimony described $TRUMP as an “abandoned project.”

( SOURCE: TradingView )

Jurisdiction Questions at the SEC

The push for an SEC investigation faces several obstacles. In February 2025, the SEC under Chair Paul Atkins said memecoins such as the TRUMP crypto token fall outside the agency’s jurisdiction because they do not meet the Howey test for securities.

The Atkins-led SEC has also shifted away from an enforcement-first approach and toward rulemaking, pausing many crypto enforcement actions and potentially considering an innovation exemption for tokenized equities without revisiting the memecoin carve-out.

Atkins’s appointment by Trump adds another political complication, since any investigation into the president’s financial interests would be politically sensitive.

As a result, the senators’ letter appears to function primarily as a political intervention in the broader crypto regulation debate, rather than as a clear path to enforcement. The issue also intersects with the Digital Asset Market Clarity Act, whose passage depends on key Senate votes.

Regulatory Gap for TRUMP Holders

The Warren-Blumenthal letter does not offer a direct remedy for the nearly one million wallets still exposed to TRUMP, underscoring the regulatory gap surrounding politically branded tokens.

TRM Labs concluded in January 2025 that while the Trump memecoin’s insider ownership warrants monitoring, it did not show clear signs of fraud. Ari Redbord, TRM Labs’ global head of policy, said the concentrated supply among a few individuals, combined with many retail investors facing losses, is likely to appear increasingly negative over time, regardless of whether the project was a rug pull.

JUST IN: US Senators call for SEC investigation into President Trump's crypto memecoin, accusing him of a "rug pull." $TRUMP coin is down 95% since launch. pic.twitter.com/9ZW6th4C1I — Watcher.Guru (@WatcherGuru) August 4, 2026

JUST IN: US Senators call for SEC investigation into President Trump's crypto memecoin, accusing him of a "rug pull." $TRUMP coin is down 95% since launch. pic.twitter.com/9ZW6th4C1I

— Watcher.Guru (@WatcherGuru) August 4, 2026

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