Trump Uses Sovereign Crypto Fund as a Payout to Political Insiders
Highly volatile cryptocurrencies are a dubious investment for government funds to begin with. But when Donald Trump announced the creation of a “strategic crypto reserve,” investors noticed it would put U.S. funds into a few, suspiciously little-known cryptocurrencies.
The economics blogger Noah Smith explains:
Trump has just announced his intention to have the government create a strategic crypto reserve. He eventually stated that the reserve would include Bitcoin and Ether, the most widely owned cryptocurrencies (disclosure: I own both Bitcoin and Ether). But initially, the only cryptocurrencies he mentioned that would be included in the strategic reserve were the less widely used Ripple (XRP), Solana (SOL), and Cardano (ADA). …
So Trump wants to take your hard-earned money and give it to whoever owns Ripple, Solana, and Cardano. …
Who stands to gain? Well, that’s the first reason crypto is such an ingenious tool for regimes to send money to favored individuals. Crypto holdings are anonymous—the public doesn’t even know who has a bunch of XRP, SOL, and ADA. But if you have a bunch of one or more of these coins, you can go whisper in Trump’s ear: “Hey man, I own a ton of Cardano.” And if you’re someone Trump wants to pay out, he can then just include Cardano in his list of cryptocurrencies that he wants the U.S. government to buy. Everyone knows that someone got a big payday, but no one knows who, except for the parties involved. Regime crypto payouts are inherently secret, even when done in plain sight.
It’s no secret Trump got into office with massive financial support from the crypto industry, who in exchange have asked for less regulation of their speculative investments. This looks like a more specific trade, with a few insiders raiding taxpayers’ money to inflate or cash out their own holdings.
The Executive Watch is a project of the Institute for the Study of Modern Authoritarianism, and its flagship publication The UnPopulist, to track in an ongoing way the abuses of the power of the American presidency. It sorts these abuses into five categories: Personal Grift, Political Corruption, Presidential Retribution, Power Consolidation, and Policy Illegality. Click the category of interest to get an overview of all the abuses under it.
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