On March 23rd, a notable cryptocurrency whale faced a staggering loss of $207,000 in just one hour trading the Official Trump (TRUMP) meme coin. This incident has raised eyebrows within the cryptocurrency community, particularly given the whale’s previous success with the token.
Earlier, this investor managed to turn a considerable investment of 1.09 million USDC into nearly $108 million by acquiring 5.97 million TRUMP tokens at an earlier stage. However, in this recent trading frenzy, the tides turned swiftly.
$207K Gone in an Hour
A blockchain analytics firm, Lookonchain, detailed the transaction in their latest update, revealing that the trader invested 5 million USDC stablecoin to purchase TRUMP immediately after a public endorsement from former President Donald Trump on TruthSocial. Trump’s enthusiastic message read,
“I LOVE $TRUMP — SO COOL!!! The Greatest of them all!!!!!!!!!!!!!!!!”
This endorsement prompted a dramatic surge in TRUMP’s price, exceeding $12.25 shortly after the announcement. However, the extreme volatility in the market led the whale to liquidate their holdings within an hour, ultimately realizing a significant loss. The excitement surrounding Trump’s endorsement generated trading volumes for the meme coin that had not been seen for weeks.
Coinciding with Inauguration Day on January 20, both President Trump and Melania Trump launched official meme coins. TRUMP witnessed an impressive rise, briefly surpassing $70, but has since plummeted, currently trading around $11.92 following a notable market crash. Meanwhile, MELANIA peaked near $13 before experiencing a drastic decline to approximately $0.69 in just two months.
The launch of these meme coins sparked considerable political debate. Criticism arose regarding the notion that the tokens exploited Trump’s name without adding tangible value to the cryptocurrency space.
In response to these developments, Representative Sam Liccardo has introduced the MEME Act, aimed at prohibiting senior government officials and their families from promoting or engaging in cryptocurrency activities, including meme coins. This legislative effort also seeks to compel Trump to forfeit any profits obtained from his family’s ventures in meme coins.
Meme Coins and Regulation
According to the Securities and Exchange Commission (SEC), meme coins such as the TRUMP token are not categorized as securities and therefore fall outside the scope of SEC regulation. The agency recently clarified that these digital assets are often propelled by online trends or memes and are designed to foster online communities rather than serve as investments.
This classification places meme coins in the realm of collectibles rather than financial securities, exempting them from conventional regulatory frameworks. This viewpoint aligns with the comments from SEC Commissioner Hester Peirce, who supervises the agency’s Crypto Task Force, tasked with revising cryptocurrency regulations. Peirce acknowledged that numerous meme coins likely do not fall under the SEC’s regulatory authority.
This incident serves as a stark reminder of the unpredictable nature of the cryptocurrency market and the need for cautious engagement, especially with assets that thrive on public sentiment and trending topics.
