Crypto.com was under siege.
For more than a year, the firm had been investigated by President Joe Biden’s Democratic administration, part of an aggressive push to regulate the largely unregulated cryptocurrency industry. Financial regulators had told the company that enforcement action was likely.
Then Donald Trump won the 2024 election, and the company’s legal peril dissipated.
Crypto.com ramped up spending to a lobbyist close to Trump and donated $11 million to political committees tied to the Republican president, records show. Within months, the investigation was dropped. By August, Crypto.com announced it was plunging roughly $1 billion worth of assets into a venture with a new partner – Trump’s social media company.
Legal and ethics experts say Crypto.com’s journey from investigative target to Trump business partner provides a case study of the conflicts of interest that have arisen in Trump’s second presidency. Unlike any of his predecessors in the modern era, Trump has allowed his family businesses to enter lucrative arrangements with companies regulated by the federal government, some of which have benefited from action taken by his administration.
In this instance, the deal struck with Crypto.com was favorable for the president’s social media company, which has lost hundreds of millions of dollars since its 2021 launch. Trump Media and Technology Group put up little cash yet received a substantial ownership stake in the new treasury for Crypto.com’s Cronos token.
PHOTOS: How a Trump Media deal with a crypto firm exposes potential conflicts of interest
Presidents have historically gone to great lengths to “avoid even the appearance that they are using the office for personal profit,” said Kedric Payne, who was formerly a top attorney for the Office of Congressional Ethics.
“It seems like another example of the pay-to-play administration,” said Payne, who leads the ethics program at the nonpartisan Campaign Legal Center in Washington. “There is clearly a perception that in order to get favorable policies and acts from the administration, a company needs to provide a financial benefit to the president.”
In a statement, Crypto.com spokeswoman Victoria Davis did not address concerns raised by legal and ethics experts.
“Crypto.com looks to partner with companies that are pro crypto and share our vision for its future,” said Davis, who called Trump Media “a pioneer in digital media.”
Trump Media did not respond to specific questions about the arrangement. In a brief statement, a company spokeswoman, Shannon Devine, called this story “obviously spoon-fed” to The Associated Press “by political operatives.”
The White House has repeatedly said that Trump has taken the proper steps to avoid conflicts of interest, pointing to his decision shortly after the presidential election to put his business holdings in a trust controlled by his sons.
“Neither the President nor his family have ever engaged, or will ever engage, in conflicts of interest,” White House press secretary Karoline Leavitt said in a statement.
Trump Media and Technology Group, which is majority owned by Trump, was not established with cryptocurrency in mind. Its flagship Truth Social platform launched in early 2022, giving the then-former president a megaphone after Twitter and Facebook banned him for his role in fomenting the Jan. 6, 2021, attack by a mob of his supporters on the U.S. Capitol. Trump has been reinstated on both platforms.
Truth Social faced hurdles in getting started. A shell company – a SPAC in financial jargon – that raised money for the venture was investigated by the Securities and Exchange Commission for misleading investors, culminating in a multimillion-dollar penalty. A SPAC board member was sentenced to prison for insider trading.
When it went public in 2024, Trump Media was forced to fend off litigation from two co-founders who accused the company of cheating them out of shares.
Trump Media has yet to turn a profit. Just last year, it lost more than $400 million. Its stock price closed on Monday at around $10.50 a share, down from a high of about $62 when it started trading in March of last year. Over the last year, company executives have branched into new lines of business, including a streaming platform, financial services – and crypto.
The move into crypto was reflective of a complete evolution in Trump’s thinking about digital currencies. Not long after leaving office in 2021, he said Bitcoin, a leading cryptocurrency, “seems like a scam.” Three years later, during his presidential campaign, he held a very different view. His family launched its own crypto company, World Liberty Financial, started selling tokens and pledged to roll back regulation of the industry.
Among those who have had business entanglements: Changpeng Zhao, the billionaire founder of Binance, who was pardoned by Trump several months after taking part in a complex deal with a sovereign wealth fund for the United Arab Emirates. As a part of arrangement, $2 billon was invested in World Liberty Financial to buy its new crypto stablecoin.
In a statement, Binance said it was “erroneous and grossly misleading” to describe the company’s business engagements with World Liberty Financial as a “conflict of interest.” The company added that the decision to use World Liberty’s stablecoin to consummate the deal was made by the UAE’s sovereign wealth fund.
The SEC also paused an investigation of Justin Sun after the crypto tycoon said he bought roughly $200 million of Trump crypto offerings.
Sun did not respond to requests for comment made through his company.
Crypto.com spent much of 2023 and 2024 battling potential regulatory action by the Biden administration. After Trump defeated Biden, the crypto firm began doling out donations to the political committees affiliated with the president-elect.
Crypto.com gave $1 million to Trump’s inauguration last December, followed by a $10 million contribution in February to MAGA Inc., the president’s super PAC. In late 2024, Crypto.com began ramping up lobbying spending to Jeff Miller, a Trump world powerbroker and GOP fundraiser who served as a finance chair of the incoming president’s inaugural festivities.
Miller, who did not respond to a request for comment, lobbied the White House and the SEC on regulatory matters, according to disclosure reports. The investigation was formally dismissed on March 27.
A spokeswoman for Crypto.com said Miller “had no involvement” with the SEC investigation. The company declined to comment on the nature or severity of the charges the SEC intended to pursue against it.
Agency commissioners during Biden’s presidency authorized bringing charges against Crypto.com. But attorneys for the company negotiated with the SEC to delay the filing of any enforcement action until after Trump took the presidency. In exchange, Crypto.com withdrew a countersuit filed against the SEC. Such negotiations are common before the SEC brings an enforcement case.
“Ultimately, the investigation was closed because there was no legitimate case to pursue,” said Davis, the spokeswoman. “There is absolutely no connection between that decision and Crypto.com’s” political activities.
“Any assertion to the contrary is entirely inaccurate,” she added.
Days before Crypto.com disclosed that the SEC’s investigation had been dropped, Trump Media was making news of its own.
When it launched a series of investment funds in March with a “Made in America focus,” Trump Media announced that Crypto.com was tapped to be the funds’ digital host.
Trump Media was eyeing even more deals, though, and the early foray between the two companies offered a glimmer of what was to come.
In April, officials for the social media company signaled that they were hunting for a telecom, media or technology company to acquire. They joined forces with a financial services firm and launched a SPAC to raise the money for the venture.
Four months later, Trump Media and Crypto.com announced the formation of Trump Media Group CRO Strategy. They said the new company would serve as a treasury for Crypto.com’s Cronos token, though company officials have not revealed many specifics.
Under the terms of the deal, which has not yet been finalized, Crypto.com is obligated to contribute the lion’s share of capital, plunging what was then valued at $1 billion worth of its Cronos token into the venture. Yorkville Advisors, a financial services firm that has worked closely with Trump Media, is providing a line of credit. Trump Media’s contribution is more limited and includes “a license to use certain intellectual property,” according to an SEC filing.
All three companies will have “majority ownership” in the new venture, according to a company press release. But how much of a stake Trump Media will hold has not yet been disclosed.
“When you consider the investigation into (Crypto.com) was dropped, the economics of this look more like a plea deal than a business deal,” said Corey Frayer, a cryptocurrency policy expert who was a senior official at the SEC during Biden’s presidency.
Hilary Allen, a law professor at American University who specializes in banking and cryptocurrency, said the deal was troubling from an ethical perspective.
With Crypto.com, “we have an investigation being dropped and an investment (in a Trump company) after the fact,” Allen said. “People can draw their own conclusions.”
Trump Media Chairman and CEO Devin Nunes told a conservative commentator in August that the new company offered consumers “two names” – Trump Media and Crypto.com – “you can trust.”
“This is really going to become the future of finance,” said Nunes, a former congressional Republican and close Trump ally.
Crypto.com appears eager to cement other deals with Trump Media. The crypto exchange announced in October that it was creating an online marketplace that will allow Truth Social users to wager on an array of world events.
Among those that users will be able to bet on: the outcome of elections.
