TRUMP Coin Faces SEC Probe Call After $3.81B Investor Losses

By Arslan Tabish | Edited By Ammar Raza,August 5, 2026, 3:00 AM

TRUMP coin faces scrutiny after Democratic senators Elizabeth Warren and Richard Blumenthal asked the SEC to investigate whether the president-linked token enabled fraud or improper enrichment. Their request follows a 98% fall from the asset’s record high.

In a letter to SEC Chair Paul Atkins, the lawmakers asked regulators to examine the token’s promotion, distribution, and trading. They said the project may have facilitated fraud or allowed insiders to secure unjust gains.

TRUMP Coin Losses Fuel Rug Pull Concerns

Warren and Blumenthal also brought up the notion of “soft rug pull.” This includes the gradual reduction in value by those who are inside the market. However, the letter written by the senators does not state that the fraud or violation of security laws took place.

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According to TRM Labs, the token did not possess any of the typical characteristics of a classic rug pull. Ari Redbord, who is the policy head at TRM Labs, confirmed to CNN that their analysis was still accurate.

The Solana-based TRUMP coin launched on Jan. 17, 2025, three days before Trump’s second inauguration. By late June, 988,905 of 1.48 million purchasing wallets held losses totaling about $3.81 billion, according to Nansen data,

TRUMP coin is trading near $1.47, with a market value of about $366 million. That price was about 98% below its record high of $73.43, despite a small daily gain.

The senators cited reports that Trump earned about $636 million from the project. A separate Reuters analysis estimated that the Trump family received roughly $616 million from the token. Reuters said incomplete wallet ownership data made any total an estimate.

CLARITY Act Ethics Fight Deepens

The request came at a time when discussions were deadlocked in the Senate on the Digital Asset Market Clarity Act. There is disagreement on the protections in place for the use of cryptocurrency by federal employees and their families.

The idea proposed by Sen. Thom Tillis and Sen. Ruben Gallego allows state attorneys general to take action against the Justice Department should it fail to enforce the restrictions. At the time of reporting the disagreement, the White House had not commented on the proposal.

Polymarket traders saw the probability of passage in 2026 at around 23% as of Aug. 5. The probability may change. The Senate must approve a bill, which then must be reconciled with the House version of the legislation before anything reaches President Donald Trump’s desk.

According to the SEC staff in February 2025, normal meme coin transactions do not usually qualify as securities offerings. Nevertheless, the SEC cautioned that such labeling should not protect a product where the economic realities qualify it as a security. 

Although the letter from the senators calls for an investigation, it does not show whether there were any violations. It is up to the SEC to conduct an investigation and ascertain the facts.

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