Rep. Maxine Waters (D-CA) shed light on an alleged “rug pull” scam that deceived thousands of investors who bought into President Donald Trump’s crypto coin, warning of financial manipulation and conflicts of interest.
During Tuesday’s House Financial Services Committee hearing, Waters contrasted her proposed “stablecoin” legislation with Trump’s unregulated cryptocurrency.
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“When Trump first issued his meme coin three days before his inauguration, I expressed my deep concern,” Waters stated. “I warned that this raised major conflicts of interest, national security risk for the country, and left consumers vulnerable to rug pulls, market manipulation, and more.”
“Unfortunately, that has happened,” she continued, reinforcing her warnings. Carole House, a senior fellow at the Atlantic Council and a witness at the hearing, provided a brief explanation of rug pulls.
“Just basically, when people are trying to hype up and get people to invest in an asset and making a broader promise and then ultimately pulling out your investments in the assets, and ultimately that ends up normally crashing the market value,” House explained.
Waters emphasized that Trump’s cryptocurrency venture posed serious ethical and financial risks. “Unfortunately, that’s just what happened,” she said. “President Trump’s insiders reportedly earned a staggering $350 million from sales and fees in the three weeks after his meme coin was launched.”
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While Trump and his associates profited, average investors suffered catastrophic losses. “While Trump ran away with his money, reports show that a far larger number of investors lost more than $2 billion after the meme coin crashed,” Waters stated.
The revelation has fueled further scrutiny of Trump’s financial dealings and the broader risks associated with unregulated cryptocurrency markets. As Congress debates crypto regulations, Waters’ warning serves as a stark reminder of the dangers that unregulated digital assets pose to unsuspecting investors.
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