Warren asks the SEC to investigate Trump's memecoin as Clarity Act stalls

Democratic Senators Elizabeth Warren (@SenWarren) and Richard Blumenthal (@SenBlumenthal) have formally asked SEC Chair Paul Atkins (@SECPaulSAtkins) to investigate the $TRUMP memecoin, citing potential illegal fraud or unjust enrichment facilitated by the token. The letter, shared first with CNN, was sent on Monday and described the token as a possible "illegal scam."

$3.8 Billion in Losses, $636 Million in Gains

The $TRUMP coin peaked at roughly $9 billion on January 19, 2025, the day before Trump's inauguration, with 80% of its supply held by Trump Organization affiliates. It has since fallen to below $400 million, a 97% decline from its peak. Nearly 1 million people lost money on the coin, racking up $3.8 billion in total losses through the end of June, according to crypto analytics firm Nansen as cited by The New York Times. At the same time, the president's own financial disclosures show an estimated $636 million in personal gains from the token.

Warren and Blumenthal raised the possibility of a "soft rug pull," a scheme where developers gradually withdraw price support rather than abandoning the project all at once, leaving retail buyers absorbing the losses over time. Ari Redbord, a former federal prosecutor and US Treasury official now at TRM Labs, told CNN that the token was not set up as a classic rug pull, but added that this "does not mean it is okay how it has played out," pointing to how price support eroded gradually in a token concentrated in a small number of hands.

The SEC issued guidance in February 2025 stating that memecoins are not securities. However, the agency also said the guidance does not apply to products simply labeled memecoins to evade securities law, and that each coin would be evaluated on a case-by-case basis. Warren and Blumenthal argue the $TRUMP coin is exactly one of those cases that warrants evaluation. Both the White House and the SEC declined to engage directly with the letter.

Clarity Act Hangs in the Balance

The letter arrives at a critical moment for crypto legislation in Washington. As of late July 2026, the Digital Asset Market Clarity Act has cleared the House and a Senate committee, but still has no floor vote, no cloture motion, and no date on the calendar. Senate Majority Leader John Thune told reporters he does not expect the bill to reach the floor before the summer recess begins around August 7.

The Senate requires 60 votes to overcome a procedural cloture motion, meaning Democrats will have to vote for the legislation to make up the difference if all Republicans were to support it. One of the most closely watched provisions in the latest draft is an ethics clause that would bar senior federal executives, including the president and vice president, from sponsoring or issuing digital assets until at least early 2029. That provision is central to whether enough Democrats come on board, and the Warren-Blumenthal letter only adds to that pressure, with several Democrats refusing to back the bill unless it addresses conflicts tied to the president's crypto holdings.

Sources:
CNN: Elizabeth Warren demands SEC investigate if Trump's memecoin is an illegal scam
Benzinga: Warren and Blumenthal demand SEC investigation into Trump memecoin
Disruption Banking: CLARITY Act update, where the bill stands right now