How a Trump Media deal with a crypto firm exposes potential conflicts of interest

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WASHINGTON (AP) — Crypto.com was under siege.

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For more than a year, the firm had been investigated by President Joe Biden’s Democratic administration, part of an aggressive push to regulate the largely unregulated cryptocurrency industry. Financial regulators had told the company that enforcement action was likely.

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Then Donald Trump won the 2024 election, and the company’s legal peril dissipated.

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Crypto.com ramped up spending to a lobbyist close to Trump and donated $11 million to political committees tied to the Republican president, records show. Within months, the investigation was dropped. By August, Crypto.com announced it was plunging roughly $1 billion worth of assets into a venture with a new partner _ Trump’s social media company.

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Legal and ethics experts say Crypto.com’s journey from investigative target to Trump business partner provides a case study of the conflicts of interest that have arisen in Trump’s second presidency. Unlike any of his predecessors in the modern era, Trump has allowed his family businesses to enter lucrative arrangements with companies regulated by the federal government, some of which have benefited from action taken by his administration.

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In this instance, the deal struck with Crypto.com was favorable for the president’s social media company, which has lost hundreds of millions of dollars since its 2021 launch. Trump Media and Technology Group put up little cash yet received a substantial ownership stake in the new treasury for Crypto.com’s Cronos token.

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Presidents have historically gone to great lengths to “avoid even the appearance that they are using the office for personal profit,” said Kedric Payne, who was formerly a top attorney for the Office of Congressional Ethics.

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“It seems like another example of the pay-to-play administration,” said Payne, who leads the ethics program at the nonpartisan Campaign Legal Center in Washington. “There is clearly a perception that in order to get favorable policies and acts from the administration, a company needs to provide a financial benefit to the president.”

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In a statement, Crypto.com spokeswoman Victoria Davis did not address concerns raised by legal and ethics experts.

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“Crypto.com looks to partner with companies that are pro crypto and share our vision for its future,” said Davis, who called Trump Media “a pioneer in digital media.”

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Trump Media did not respond to specific questions about the arrangement. In a brief statement, a company spokeswoman, Shannon Devine, called this story “obviously spoon-fed” to The Associated Press “by political operatives.”

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The White House has repeatedly said that Trump has taken the proper steps to avoid conflicts of interest, pointing to his decision shortly after the presidential election to put his business holdings in a trust controlled by his sons.

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“Neither the President nor his family have ever engaged, or will ever engage, in conflicts of interest,” White House press secretary Karoline Leavitt said in a statement.

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Trump Media gets into crypto

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Trump Media and Technology Group, which is majority owned by Trump, was not established with cryptocurrency in mind. Its flagship Truth Social platform launched in early 2022, giving the then-former president a megaphone after Twitter and Facebook banned him for his role in fomenting the Jan. 6, 2021, attack by a mob of his supporters on the U.S. Capitol. Trump has been reinstated on both platforms.