Following his controversial acquisition and display of a $6.2 million banana in an art stunt, Chinese crypto entrepreneur Justin Sun has made headlines once again. This time, he has invested $30 million, equivalent to approximately $23.5 million, into the cryptocurrency firm World Liberty Financial.
The company has struggled since its launch in October, and investors have appeared cautious about its future and the conditions it offers.
However, it presented a potentially appealing aspect: the opportunity to engage in business with a company associated with and endorsed by Donald Trump.
Mr. Sun’s investment pushed the company past the threshold, enabling the president-elect to start reaping profits from the venture. Trump and his family find themselves poised to amass approximately $20 million, with the possibility of significantly higher earnings on the horizon.
Mr Sun, facing fraud charges in the United States linked to his cryptocurrency venture, did not provide answers regarding the reasons behind his interest in the tokens, which are not available for trading.
The episode has raised significant concerns among government ethics experts, who view it as a sign that Trump’s growing business interests have created unprecedented opportunities for individuals seeking to sway US policy to direct funds towards him.
“The conflicts have expanded significantly alongside the growth of his business empire,” stated Richard Painter, who held the position of chief ethics lawyer at the White House during the George W. Bush administration.
Trump’s team dismissed the concerns in a statement provide.According to Trump spokeswoman Karoline Leavitt, during his initial term, President Trump distanced himself from his extensive real estate holdings, opting to pursue a political career while forgoing his government salary.
“In a departure from the typical political landscape, President Trump has positioned himself as a leader motivated not by personal gain but by a genuine passion for the American populace. His commitment to revitalising the nation is framed as a mission to restore its former greatness.”
Despite growing concerns regarding potential corruption and its implications, Trump has largely remained inactive as he gears up for a possible return to the White House.
Emerging prospects
Trump has previously encountered enquiries regarding potential conflicts of interest.
Throughout his initial term in office, the Trump International Hotel in Washington, DC, emerged as a focal point of controversy, attracting lobbyists, foreign diplomats, and allies who frequented the establishment for lodging and expenditures.
Critics contended that the hotel provided a means for Trump to indirectly benefit financially from his position in office. He is currently confronting a series of accusations and lawsuits that claim he breached the US Constitution’s prohibition against presidents accepting foreign payments, which pertains to profiting from their official position.
Experts have noted that expanding his business empire, now encompassing a publicly traded social media company, a cryptocurrency firm, and connections to a Saudi-backed golf league, enables individuals seeking to gain favour to transfer funds with greater discretion and in significantly more significant amounts.
“The scale has expanded, and the accessibility has grown,” stated Michael Ohlrogge, a law professor at New York University, who has conducted research on Trump Media, the company behind Truth Social, which now constitutes the majority of Trump’s $6 billion fortune. “The capacity for booking hotel rooms is limited.”
Prof Ohlrogge highlighted a scenario on Truth Social where a foreign government or business might buy advertisements to persuade investors that a company is gaining momentum, potentially leading to a surge in its stock price.
Despite Trump Media’s market value exceeding $7 billion, there has been scant evidence of significant activity. This year, the company announced ad sales totalling under $5 million.
According to Prof Ohlrogge, the stock market’s “amplifying” effect suggests minimal spending could result in substantial gains for Trump, who possesses over half of the company’s shares.
The intersection of Trump’s business interests and his responsibilities as a public official is particularly evident in the cryptocurrency sector. Here, he has not only intensified his engagement but has also made commitments to advocate for the industry during his tenure in the White House.
The proposed agenda features a regulatory rollback alongside innovative concepts, including establishing a national Bitcoin reserve, where the government would accumulate the cryptocurrency.
“One of the key issues that will be addressed in the coming years is the regulation of cryptocurrency,” stated Virginia Canter, chief ethics counsel at the nonpartisan Citizens for Responsibility and Ethics in Washington. He is currently an engaged participant in the cryptocurrency market. The potential regulation may significantly impact his wealth and influence his stance.
Nik Bhatia, the founder of Bitcoin Layer, a company promoting Bitcoin investments, asserted that it would be an error. Theard Trump’s position on cryptocurrency is solely motivated by personal financial gain.
“These actions, in my view, are not driven by self-interest; rather, they reflect the electorate’s will,” he stated.
However, he remarked, “I believe there is likely a conflict of interest, as his pro-crypto position could advantage his company.”
This week, former President Trump announced his intention to nominate Paul Atkins, a well-known industry lobbyist, to head the Securities and Exchange Commission (SEC).
There is intense anticipation that he will reduce enforcement efforts at the agency responsible for overseeing publicly traded companies, including Trump Media, in fraud and insider trading matters. The Securities and Exchange Commission has implemented a stringent enforcement strategy targeting the cryptocurrency sector during President Joe Biden’s administration.
Mr. Sun, an investor associated with World Liberty Financial, found himself embroiled in a significant crackdown by the SEC last year. The agency brought charges against him and his company for not adequately registering with the government while selling specific digital assets, along with other allegations.
According to John Coffee, a professor at Columbia Law School and a recognised authority in securities law, the agency may now be under new leadership, which could result in the case being dismissed.
“Mr. Atkins is primarily characterised by his aversion to enforcement and his desire to limit the scope of cases pursued by the SEC significantly,” he stated.
When Mr. Sun announced his investment last month, he notably omitted any reference to the SEC complaint, which he has characterised as lacking merit. Instead, he highlighted Trump’s perspectives on cryptocurrency.
“The United States is emerging as the blockchain hub, and Bitcoin has attributed this development to @realDonaldTrump!” he stated on X. TRON is dedicated to revitalising America and spearheading innovation. Let’s get started!
Reduced safety barriers
US law offers minimal restrictions regarding conflict of interest, as presidents are not subject to the same regulations that govern other government employees and cabinet officials.
While the US Constitution ostensibly prohibits presidents from accepting gifts from foreign governments during their tenure, the Supreme Court has previously dismissed two lawsuits from Trump’s first term that raised concerns about potential conflicts of interest.
Last summer, a ruling in a case involving Trump established that presidents enjoy extensive immunity from criminal prosecution during their time in office.
Former President Trump has previously contended that his tenure in the White House adversely affected his business interests. He cited concerns from partners who severed ties due to controversies and the legal challenges and investigations he encountered during that period.
As Trump gears up for a second term in the White House, he has not yet presented an ethics plan, a standard practice for incoming administrations. He has shown minimal indication of addressing these concerns.
He has committed to retaining his stake in Trump Media, continues promoting Trump-branded merchandise, and associates his name with initiatives such as World Liberty Financial. The Mar-a-Lago club continues to serve as a venue where affluent individuals, prepared to invest in membership, can connect with the president, often without significant transparency.
Concerns are mounting among ethics experts regarding the implications of Trump’s actions, which may have set a precedent that could prove challenging to reverse.
Mr. Painter remarked, “Trump has received the message that he can act as he pleases, given his victory.” “Future presidents may observe this situation and conclude, ‘We have the freedom to act as we please.'”