By Hannah Lang, Elizabeth Howcroft, Michelle Conlin and Medha Singh
NEW YORK (Reuters) -Crypto exchange Coinbase assures users on its website that it puts any new digital coin through “rigorous” vetting before allowing it to trade. It’s an at-times lengthy process meant to protect customers by examining the people connected to the project and the risk of market manipulation or other scams.
With President Donald Trump’s crypto token, $TRUMP, Coinbase made up its mind in just one day.
The $TRUMP token, which launched three days before his inauguration in January, is a meme coin. Based on cultural fads or celebrities, these coins have no intrinsic value and – past experience has shown – are prone to large price swings that can leave investors with losses.
A Reuters analysis of crypto market data and industry announcements found that, compared to other recent large meme coins, the biggest crypto exchanges took Trump’s to market with unusual speed, despite stating they vet risky coins thoroughly to protect small investors.
Some also approved the listing in spite of the high share of coins concentrated in the hands of Trump and his partners, which would normally represent a red flag because of the risk that dumping of tokens by insiders could collapse the price and hurt other investors, some executives said.
After reaching an all-time high of $75.35 on April 19, just two days after its launch, $TRUMP crashed to the $7 range by early April, leaving many holders nursing losses. It was trading around $9.55 Thursday.
“When the president of the United States launches a meme coin, I thought I might as well put some money inside,” said Carl “Moon” Runefelt, a Dubai-based crypto investor who runs a bitcoin trading channel on YouTube called the “Moon Show.”
Runefelt said he bought $300,000 worth of the meme coin in tranches at between $50 and $60: “It’s probably one of my worst trades, unfortunately.”
The Reuters analysis showed that eight of the 10 largest crypto exchanges by market share listed the coin within 48 hours of its release. The ninth, Coinbase, added $TRUMP to its listings roadmap on January 18 – indicating it had decided to accept it – and listed the coin three days later. The tenth, Upbit, listed $TRUMP on February 13.
That was much faster than they’ve done on average with the biggest meme coins.
Reuters examined how long it took the same 10 exchanges – Binance, Gate.io, Bitget, MEXC, OKX, Coinbase, Bybit, Upbit, Crypto.com and HTX – to list the four other largest meme coins launched since 2022.
These, measured by market cap on May 29, are Pepe, Bonk, Fartcoin and dogwifhat. All 10 exchanges listed Pepe and Bonk. Nine listed dogwifhat, and seven listed Fartcoin.
On average, the 10 exchanges took 129 days to list those coins. For $TRUMP, they took an average of four.
Asked for comment about why they listed $TRUMP so quickly, Bitget, MEXC, OKX, Coinbase and Upbit all said they had not cut any corners with their vetting process. The other five exchanges did not respond to Reuters’ questions.
Three – Bitget, Coinbase, MEXC – said they moved fast to respond to overwhelming demand for the $TRUMP coin.
“The crypto space was buzzing with the hype and, as any other token with a growing craze, it was imperative to add TRUMP,” Gracy Chen, Bitget’s CEO, said in a statement.
Chen said the fact that Trump himself announced the coin on his social media accounts “should kind of solve the compliance issue,” citing the fact that “he’s the president of the United States.”
‘NO CONFLICTS OF INTEREST’
Reuters found no suggestion that Trump or anyone related to his businesses exerted pressure on the exchanges. In response to a request for comment, a White House press official told Reuters the president’s assets had been placed in a family trust: “There are no conflicts of interest because the president isn’t managing the assets. Any insinuation that there is a conflict of interest is irresponsible.”
The official referred specific questions about the meme coin to the Trump Organization, which did not respond to Reuters.
Coinbase said the $TRUMP token got no special exceptions and the exchange followed its normal process when listing the coin. Paul Grewal, Coinbase’s chief legal officer, said many people had to work over the weekend to get the listing done quickly, but no steps were skipped.
“Given the information that was shared publicly, we were confident that users could engage with the token positively and safely,” Grewal told Reuters.
Coinbase listed $TRUMP as an “experimental” token to indicate it comes with “certain risks, including price swings,” according to the company’s website.
The vetting of coins often focuses on how well-known the issuer is, how likely they are to remain in the public eye and how much they engage with the online community to sustain interest in the coin, metrics that $TRUMP would score highly on, according to Santa Clara University finance professor Seoyoung Kim, who specializes in crypto analytics.
She cautioned that focusing on vetting speed alone could provide an incomplete picture of investor protection.
A more holistic analysis, Kim said, would also involve factors such as the average market cap at which a coin is listed, for how long it has sustained that level before its listing, and its daily trading volumes.
With $TRUMP listed so soon after launch, there was little such data for exchanges to parse. $TRUMP’s market cap has since fallen to around $1.9 billion, down sharply from its peak above $15 billion on January 19. But that still ranks it amongst the largest meme coins launched since 2022.
Reuters ran its listing-speed analysis past five academics with crypto expertise, including Kim, who all said its methodology was sound.
David Krause, Emeritus Professor of Finance at Marquette University, who has studied Trump’s crypto ventures, said the quickness of the $TRUMP listing “suggests either a dramatic acceleration of due diligence or corners being cut.”
“Either scenario has significant implications for investor protection and market integrity,” he said.
YOU DON’T SAY NO TO THE PRESIDENT
The president’s rush of business ventures in a lightly-regulated sector that his government is responsible for overseeing has drawn criticism from Democrats, consumer advocacy groups and former financial enforcement officials.
“You don’t say no to hosting the president’s new meme coin,” said Corey Frayer, a former senior crypto advisor at the U.S. Securities and Exchange Commission. Frayer is now director of a non-profit advocacy group, the Consumer Federation of America. “The president controls who oversees your business and how they enforce the law.”
Under former President Joe Biden, the SEC maintained that most crypto tokens, including meme coins, should be regulated as securities, making exchanges cautious about listing them. That began to change, quickly, after Trump was elected last November.
The Republican has styled himself as the “crypto president,” pledging to overhaul regulation of the sector. Following Trump’s election, Coinbase – the largest publicly traded crypto exchange in the United States – and several of its rivals began listing more meme coins.
In Trump’s second term, the SEC has paused or withdrawn high-profile enforcement actions against crypto operators, including a major investor in a Trump family crypto project, and issued a staff statement concluding that meme coins do not constitute securities.
An SEC spokesperson declined to comment on the agency’s crypto policy and Trump’s coin.
Trump’s family has launched multiple crypto ventures, raking in hundreds of millions of dollars. The $TRUMP token quickly earned an estimated $320 million in fees, though it’s not publicly known how that amount has been divided between a Trump-controlled entity and its partners.
OVERLOOKED CONCERNS
Exchanges have been major beneficiaries of Trump’s embrace of the industry. $TRUMP has generated significant revenue for the 10 exchanges in Reuters’ review: more than $172 million in trading fees, according to estimates based on standard fees compiled for the news agency by CoinDesk Data, a crypto industry data provider.
Trade in the coin, meanwhile, has favored a small group of investors.
At the top, 45 crypto wallets cleared about $1.2 billion in profits overall, while another 712,777 wallets have collectively lost $4.3 billion, according to trading data analyzed by crypto analysis firm Bubblemaps as of June 18. In the middle, more than half a million wallets made an average of $5,656 profit each.
In listing $TRUMP, some exchanges proceeded despite a factor they’d previously labelled as a red flag: 80% of the coin’s supply was held by the Trump family and its partners. Such a high concentration of ownership can allow the team behind a coin to sell large amounts of it at once, collapsing the price for retail investors. The terms of the $TRUMP coin specified that its total supply would be gradually unlocked over three years after initial release.
On January 16, the day before $TRUMP was released, the New York State Department of Financial Services issued an alert to consumers about the risks of meme coins. Such coins, the notice said, are carried by platforms not licensed by the state and the supply of the digital tokens is often controlled by a small number of people.
That opens the door to “pump-and-dump schemes,” the regulator noted, in which public hype by their issuers leads to a jump in price – with big, early investors exiting and smaller retail buyers left holding the losses that follow.
The NYDFS declined to comment beyond the guidance.
Coinbase, which is subject to New York regulations, blocked state residents from accessing the token, but allowed U.S. customers elsewhere to trade. To list $TRUMP in New York, the exchange would have faced a long list of risk assessment and governance requirements.
Some other exchanges acknowledged they looked past concerns about the concentration in a bid to serve customer demand.
MEXC’s chief operating officer, Tracy Jin, told Reuters that, because of the concentration of tokens, $TRUMP did not meet its usual standards for a full listing on its main board, but the exchange pushed ahead anyway due to strong demand.
In a follow-up written statement, an MEXC spokesperson said that a “faster-than-usual” listing was possible because the coin had clear market momentum and it met “our listing standards early.” Commenting on the Reuters listing-speed analysis, the spokesperson said market conditions and demand for political meme tokens had changed since 2022, “making direct comparisons less relevant.”
Bitget also had concerns about the 80% figure, CEO Chen told Reuters.
“Eighty percent held by the team, even though there’s a little bit of a lock-up period, is in my opinion very risky,” said Chen. “Ultimately, user trading volume, demand … overrode the so-called risky factor here.”
Like some exchanges, Bitget, based in the Seychelles, does not have a business presence in the U.S. or serve clients who reside there, Chen said. “Globally,” she added, “people are generally aware of the risks associated with trading meme coins.”
Upbit, which operates in South Korea, said it does not comment on specific coin listings but that it has “a rigorous and comprehensive evaluation process.”
Erald Ghoos, CEO for Europe of OKX, said the exchange’s legal and compliance teams stayed up all night over different time zones to work on the listing.
Seychelles-registered OKX says its diligence process requires “meticulous preparation.” It decided to list $TRUMP within 26 hours.
(Editing by Tom Lasseter, Tommy Reggiori Wilkes, Paritosh Bansal, and Daniel Flynn)
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