By Elizabeth Howcroft, Rae Wee and Michelle Conlin
PARIS/SINGAPORE (Reuters) - The crypto project connected to President Donald Trump, World Liberty Financial, raised $1 billion in token sales, the company said on Monday, as a new Trump memecoin also soared to more than $10 billion in market value as Trump took office for his second term.
The boom in Trump-related crypto ventures comes as he promises to usher in a new "golden age" for cryptocurrencies, in stark contrast to the regulatory scrutiny of the industry the Biden administration enforced.
WLF, promoted and formed by Trump, his sons, and Trump's new special envoy to the Middle East, Steve Witkoff, launched two months before the U.S. election.
Trump's new memecoin, branded $TRUMP, was launched Friday night during the first-ever Crypto Ball in Washington, D.C., in conjunction with festivities for the inauguration. The coin surged on Monday from less than $10 on Saturday morning to as high as $74.59 before giving up some of its huge rise on Monday.
The new coin expanded his cryptocurrency interests beyond WLF.
Melania Trump launched her own coin, $MELANIA, on Sunday. Its rally pushed its market cap well beyond $1 billion.
Four-fifths of Trump coin's tokens are owned by CIC Digital, an affiliate of Trump's business, and another entity called Fight, Fight, Fight, according to its website. It says the coins are "an expression of support for, and engagement with, the ideals and beliefs embodied by the symbol '$TRUMP'" and are not an investment or security.
The launch of WLF just two months before November's U.S. election caused concern over ethics and conflicts of interest. The launch of the memecoin Friday night also raised red flags, even among those in the cryptocurrency industry.
"While it's tempting to dismiss this as just another Trump spectacle, the launch of the official Trump token opens up a Pandora (CSE:PNDORA)'s box of ethical and regulatory questions," said Justin D'Anethan, an independent crypto analyst based in Hong Kong.
Cryptocurrency lawyer Preston Byrne published a blog post on Sunday in which he predicted a 90% probability of a civil lawsuit opposing the coin within the next 14 days.
"Someone will lose money, some lawyer will come up with a theory and file," Byrne wrote. "The memecoin launch is, from a purely political perspective, an enormous unforced error."
Byrne declined to comment further.
The Trump Organization said this month the president would hand daily management of his multi-billion-dollar real estate, hotel, golf, media and licensing portfolio to his children when he entered the White House.
By 2:45 p.m. EST Trump's coin was trading at $42.20, giving it a market cap of about $8.5 billion, according to CoinMarketCap.
Twenty-four-hour trading volume was nearly $40 billion, CoinMarketCap data showed.
WLF had sold nearly 22 billion tokens on Monday, according to the company's website, trampling past its original goals.
That includes a total investment of $75 million from Tron founder Justin Sun, who was charged with crypto-related fraud and securities violations during the Biden administration.
Excitement over the so-called meme coins aided a wider rally in cryptocurrency prices as traders and investors grew more hopeful that Trump would keep his promise to be a "crypto president" by loosening regulations and promoting ownership of digital assets.
Several key figures in Trump's administration and his circles have ties to the crypto industry.
Bitcoin hit $104,031.00 on inauguration day and has surged nearly 7% so far this month.
The Trump and Melania cryptocurrencies were created on the lesser-known Solana blockchain, which CoinMarketCap ranks as the third-biggest blockchain network.
The price of Solana's coin also rose over the weekend, hitting an all-time high of $294.33 on Sunday.
"The cryptocurrency market gained additional popularity in recent hours due to the launch of the TRUMP and MELANIA cryptocurrencies just before the inauguration," said Grzegorz Drozdz, market analyst at Conotoxia Ltd, in a statement.
SPECULATIVE ASSETS
Peter Schiff, chief economist and global strategist at Euro Pacific Asset Management, pointed to the jump in $TRUMP's value and called it the new digital gold, on social media.
Trump's net worth is estimated by Forbes at $6.7 billion. That does not include the value, at least on paper, of the $Trump coin or his earnings from WLF.
The prospect of looser regulations around crypto policy has been met with fanfare by the industry and had turbocharged a rally in bitcoin following Trump's election victory in November.
The huge rise in the new coin prices prompted concern among some analysts.
"Meme cryptocurrencies, like these, are prone to large fluctuations and we generally consider them as speculative assets," Drozdz at Conotoxia said.
Trump's coin represented a blending of the world of decentralised finance into the political arena, but it also "blurs the lines between governance, profit and influence," D'Anethan said.
"Should public figures, especially those with such political clout, wield this kind of sway in speculative markets? That's a question regulators are unlikely to ignore," he said.
The websites for both Trump's and Melania Trump's coins avoid referring to them as cryptocurrencies, instead using the phrase "fungible crypto assets" in their FAQs.
On Sunday, Donald Trump Jr. posted on X that the $Trump coin is the "hottest digital meme on earth" and that WLF would be the "future of finance."
"We are just getting started," he said.