The US Senate's Permanent Subcommittee on Investigations, headed by Democrat Richard Blumenthal, is conducting a formal inquiry into President Donald Trump's involvement in the cryptocurrency sphere. The investigation focuses on potential conflicts of interest and breaches of federal ethics laws related to the Official Trump (TRUMP) token and the World Liberty Financial (WLFI) project.

Letters dated May 6 were sent to Bill Zanker of Fight Fight Fight LLC, the company behind the TRUMP meme coin, and Zach Witkoff, co-founder of WLFI, detailing the preliminary inquiry. The probe aims to uncover any violations of government ethics rules, with concerns raised about questionable practices carried out by both firms. Allegations include facilitating investments from foreign governments and individuals under federal investigation, which could violate the US Constitution's foreign emoluments clause.

Specifically, the letter addressed concerns about the TRUMP coin's value manipulation, likened to a 'pump and dump' scheme in the cryptocurrency market. The promotion of a "Dinner with Trump" initiative was noted to have revived interest in the coin but raised suspicions of insider trading and exploitation of the President's influence for personal gain.

In the case of WLFI, President Trump's ties to the project as "Chief Crypto Advocate" and his sons' involvement have raised further red flags. The letter highlighted potential conflicts of interest and national security risks associated with WLFI's financial dealings, including investments from individuals facing allegations of market manipulation and connections to Russian banks.

The Subcommittee is gathering detailed information on both companies' financial activities, ownership structures, and interactions with foreign entities to ascertain compliance with regulations on insider trading, foreign influence, and sanctions laws.

In response to these concerns, Senator Chris Murphy and Congressman Sam Liccardo introduced the Modern Emoluments and Malfeasance Enforcement (MEME) Act to prohibit high-ranking government officials and their families from engaging in the issuance, sponsorship, or endorsement of digital assets like meme coins.

Senator Murphy criticized the TRUMP meme coin as unethical and corrupt, accusing it of enabling foreign entities to discreetly influence the Trump administration. The investigation led by Blumenthal and the introduction of the MEME Act signal a broader effort by Democratic lawmakers to address ethical issues surrounding cryptocurrency in the political sphere. The White House has yet to comment on the inquiry or the proposed legislation.