Democratic senators Elizabeth Warren and Richard Blumenthal have formally requested that the Securities and Exchange Commission (SEC) open an investigation into whether the $TRUMP memecoin was an “illegal scam,” according to a letter seen by CNN. The senators, who have repeatedly raised concerns about the intersection of crypto and Trump family finances, are asking SEC Chair Paul Atkins — a Trump appointee — to probe potential fraud and unjust enrichment tied to the token.
The $TRUMP coin launched days before the 2025 presidential inauguration, briefly reaching a market capitalization of roughly $9 billion on January 19, 2025. Today, CoinMarketCap data places its value under $400 million. Nansen analysis estimates that close to one million people have lost about $3.8 billion through the venture as of June 2026. The senators describe the episode as a possible soft rug pull, in which price support is gradually withdrawn rather than in a single dump, leaving latecomers with deep losses while early buyers and the creator walk away with profits. “The SEC must be willing to enforce the law even when potential wrongdoers include those with powerful political connections,” they wrote.
Blockchain intelligence firm TRM Labs has previously rejected the rug pull label, stating in 2025 and again this year that the project “does not have the hallmarks of a rug pull.” However, TRM’s global head of policy, Ari Redbord, noted the outcome remains damaging: a small group of early buyers and the coin’s creator profited while most later investors suffered massive losses.
The senators’ request faces a jurisdictional barrier. In late February 2025, the SEC issued guidance clarifying that memecoins are not securities, narrowing the agency’s authority to police such tokens. The White House referred questions to the Trump Organization, and the SEC declined to comment. The letter adds to growing pressure that has already stalled crypto legislation on Capitol Hill, with several Democrats refusing to support a federal regulatory bill unless it addresses conflicts tied to the president’s holdings.
