Potential business conflicts arise as Trump expands his crypto and media empire

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Shortly after buying and publicly consuming a $6.2m banana as part of an art world stunt, Chinese crypto entrepreneur Justin Sun made another significant purchase, investing $30m ($23.5m) into a cryptocurrency firm called World Liberty Financial.

The company had struggled since its launch in October, with investors hesitant about its prospects and terms.

However, it offered an appealing feature: the opportunity to do business with a firm associated with and endorsed by Donald Trump.

Mr Sun’s investment pushed the company past the threshold that allowed the president-elect to start profiting from the venture. Trump and his family now stand to gain around $20m – possibly more.

Mr Sun, who is facing fraud charges in the US related to his own crypto business, did not respond to inquiries about what led to his interest in the tokens, which are non-tradable.

This incident raised concerns among government ethics experts, who view it as a sign that Trump’s expanding business ventures have created opportunities for individuals seeking to influence US policy to funnel money towards him.

“The conflicts have increased significantly with the extent of his business empire,” said Richard Painter, former chief ethics lawyer in the George W Bush administration.

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Trump speaks at a Bitcoin conference in Nashville in July.

In a statement to the BBC, Trump’s team dismissed the concerns.

“In his first term, President Trump divested from his multi-billion-dollar real estate empire to run for office and declined his government salary,” said Trump spokeswoman Karoline Leavitt.

“Unlike most politicians, President Trump entered politics out of love for the people and with the goal of making America great again.”

Despite worries about potential corruption, or its appearance, Trump has taken minimal action as he prepares to return to the White House.

New opportunities

Trump has faced questions regarding conflicts of interest previously.

During his first term, the Trump International Hotel in Washington, DC became a symbol of the issue, attracting lobbyists, foreign diplomats, and allies.

Critics contended that the hotel provided a way for Trump to profit indirectly from his position. He was accused of violating the US Constitution’s prohibition on presidents receiving foreign emoluments – profiting from their role.

However, his business empire’s expansion, which now includes a publicly traded social media company, a cryptocurrency firm, and links to a Saudi-backed golf league, facilitates potential for individuals seeking to gain favor to direct money more discreetly and in larger amounts.

“The scale and ease have increased,” said Michael Ohlrogge, a law professor at New York University, who has studied Trump Media, the company behind Truth Social and a significant portion of Trump’s $6bn wealth. “There are only so many hotel rooms to book.”

Prof Ohlrogge noted that on Truth Social, a foreign entity or business could purchase ads to persuade investors that the company was making progress, leading to a surge in its stock price.

Despite having a market value exceeding $7bn, there has been little sign of such activity so far at Trump Media, with less than $5m in ad revenue reported this year.

However, given the stock market’s impact, Prof Ohlrogge indicated that even a modest investment could result in substantial gains for Trump, who owns over half the company’s shares.

“His pro-crypto stance”

The intersection of Trump’s business interests and public duties is most evident in the crypto industry, where he has increased his personal involvement while pledging to promote it during his time in office.

His proposals include deregulation and initiatives such as a national Bitcoin reserve, where the government would stockpile the cryptocurrency.

“One of the crucial issues to address in the coming years is crypto regulation,” said Virginia Canter, chief ethics counsel at Citizens for Responsibility and Ethics in Washington. “He is now an active participant in the crypto market. The regulation of crypto could impact his personal wealth and the stance he takes.”

Nik Bhatia, founder of Bitcoin Layer, a firm advocating Bitcoin investments, believes it would be inaccurate to dismiss Trump’s crypto stance as solely driven by his financial interests.

“I don’t see these actions motivated by self-interest – they represent the electorate,” he stated.

“However, there likely is a conflict of interest in that his pro-crypto position could benefit his company,” he added.

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Trump International Golf Club in West Palm Beach, Florida is one of many businesses owned by President-elect Donald Trump

This week, Trump announced his intention to nominate Paul Atkins, a lobbyist for the industry, to lead the Securities and Exchange Commission (SEC).

Atkins is expected to reduce enforcement at the agency, responsible for overseeing publicly traded companies like Trump Media for issues such as fraud and insider trading. The SEC had intensified its scrutiny of the crypto industry during President Joe Biden’s term.

Mr Sun, the investor in World Liberty Financial, was involved in the SEC crackdown last year, facing charges of improperly registering with the government while selling certain digital assets, among others.

With new leadership, the agency may opt to dismiss the case, according to John Coffee, a securities law expert at Columbia Law School.

“Atkins is known for his aversion to enforcement and desire to limit the types of cases the SEC pursues,” he explained.

When announcing his investment last month, Mr Sun did not reference the SEC complaint – which he maintains is baseless – but highlighted Trump’s crypto views.

“The U.S. is emerging as the blockchain center, and Bitcoin has @realDonaldTrump to thank!” he posted on X. “TRON is dedicated to restoring American greatness and spearheading innovation. Let’s go!”

Fewer guardrails

US law lacks restrictions on conflict of interest for presidents – they are not subject to the same regulations that govern other government officials and cabinet members.

Though the US Constitution theoretically prohibits presidents from accepting gifts from foreign governments while in office, the Supreme Court dismissed two previous lawsuits against Trump in his first term concerning potential conflicts of interest.

Last year, the Supreme Court ruled that presidents enjoy broad immunity from criminal prosecution while in office.

Trump has previously argued that his businesses suffered during his tenure as president due to controversies, investigations, and legal challenges.

As he prepares to return to the White House, Trump has not revealed an ethics plan, a customary move, and has shown little indication of addressing these concerns.

He has vowed to retain his stake in Trump Media, continues to promote Trump-branded products, and lends his name to ventures like World Liberty Financial. His Mar-a-Lago club offers wealthy members the opportunity to meet with the president with minimal transparency.

Ethics experts fear that Trump has set a precedent that will be challenging to reverse.

“Trump believes he can act with impunity because he won,” Mr Painter remarked. “Future presidents may interpret this to mean they can act without consequences.”

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