In addition to potential foreign influence, observers are concerned that Trump’s crypto ventures could threaten market stability and integrity, and open up global markets to manipulation. Referencing USD1, Heath Mayo — the founder of the Trump-alternative conservative movement Principles First — said that a sitting president issuing an instrument backed by public debt should be illegal, adding that the project had “terrible incentives and corrupt use of US taxpayer credit.”Rossow said that the president’s role in a stablecoin project while at the same time working to craft stablecoin legislation in the form of the GENIUS Act is “a constitutional violation that could destabilize regulatory integrity.”Trump’s influence over the industry and ability to drop enforcement actions against crypto executives who support him creates “an uneven playing field, disadvantaging competitors and violating principles of equal protection under the law.”What options do regulators have regarding Trump’s crypto conflicts of interestTrump, who has long stated an affinity with former President Andrew Jackson, seems to be holding to the latter’s strategy of acknowledging judicial rulings — and then doing what he wants regardless. The presidential administration has already shown that it is willing to defy orders from federal judges when, earlier this month, it ignored a verbal order from a federal judge to turn around two planes full of alleged gang members bound for the Terrorism Confinement Center in El Salvador. Regarding crypto, Senator Elizabeth Warren has already called for an ethics probe into Trump’s crypto activities.
There are also concerns over the possibility of market manipulation and violations of the emoluments clause of the US Constitution — a section of the document that protects against undue influence over American leaders. As regards the latter, cyber and digital media attorney Andrew Rossow told Cointelegraph that the stablecoin is “a direct affront to constitutional safeguards meant to prevent conflicts of interest.”“With Trump and his family controlling 60% of World Liberty’s equity interests, the USD1 stablecoin could facilitate indirect financial gains or undue foreign influence over US policy, particularly if foreign entities invest in or use the stablecoin.”WLFI makes up a sizeable chuck of Trump’s estimated net worth.
Source: FortuneCorey Frayer, who worked on crypto policy at the SEC under former President Joe Biden, said that the project’s emphasis on cross-border payments was particularly worrisome and that foreign entities may invest as a way to gain favor with Trump.“There’s a lot of opacity around this marketplace, and prior relationships with illicit finance,” Frayer told The New York Times. US policymakers have already noted the possibility for foreign influence following the launch of Trump’s eponymous memecoin in January.
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