Trump Wallet Project Halted After Cease-and-Desist Letter

A wallet project was promoted by Magic Eden and Trump-themed meme coin creators, but it very quickly drew sharp backlash from Trump’s inner circle. Donald Trump Jr. publicly denied any connection and teased an official Trump-backed crypto wallet. The controversy happened amid the increasing political tension over Trump’s crypto involvement. 

During a House Financial Services Committee hearing, Representative Maxine Waters warned that Trump’s digital asset ventures could undermine investor protections and exploit proposed legislation like the CLARITY Act. At the same time, the president’s recent meme coin fundraiser dinner raised $148 million, which further blurred lines between politics and crypto. Meanwhile, Trump’s feud with Elon Musk caused wider market jitters, and triggered $278 million in outflows from US spot Bitcoin ETFs. The spat also flipped market sentiment from “Greed” to “Fear.”

WLFI Issues Cease-and-Desist Over Trump Wallet

World Liberty Financial (WLFI), a crypto platform backed by US President Donald Trump and his family, issued a cease-and-desist letter to Fight Fight Fight LLC, the creators of the TRUMP meme coin and operators of Gettrumpmemes.com. The legal action started after the announcement of a new Trump-branded crypto wallet, which WLFI claims was developed without the Trump Organization’s involvement. 

Magic Eden and the meme coin team recently promoted a waitlist for the wallet, which attracted immediate backlash from Trump’s inner circle. Donald Trump Jr., who serves as WLFI’s “Web3 ambassador,” publicly denied any affiliation with the wallet project and teased the official launch of a Trump-approved wallet in the near future.

According to Bloomberg, the cease-and-desist notice is not yet publicly available, but sources familiar with the matter confirmed its existence. Despite the legal warning, the original promotional posts on X from Magic Eden and Gettrumpmemes are still live. However, the associated website, TrumpWallet.com, has gone offline.

WLFI raised over $550 million through token sales as of March, and is already under scrutiny for its USD1 stablecoin. The token made headlines in May when an Abu Dhabi-based firm revealed plans to use USD1 to settle a $2 billion investment in Binance. The Trump family holds equity in WLFI and benefits financially through a company linked to the president that collects transaction fees.

The political ramifications of Trump’s crypto ventures are intensifying. Some Democratic lawmakers accused the president of using his office to enrich himself through his digital asset businesses. These allegations could complicate efforts to pass key legislation in Congress, including bills that would regulate payment stablecoins and establish a market structure for digital assets.

Lawmakers Clash Over Trump and Crypto Rules

Lawmakers in the US House Financial Services Committee seem increasingly divided over how to regulate digital assets, and this could be due to the fact that President Donald Trump’s crypto affiliations are casting a shadow over bipartisan efforts. During a June 4 hearing, Representative Maxine Waters voiced her sharp concerns over Trump’s involvement in the crypto industry, and warned  that the proposed Digital Asset Market Clarity (CLARITY) Act could be exploited by the president to further his financial interests. 

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Waters pointed to Trump’s recent dinner with top meme coin holders, and warned that the bill could allow him to funnel Americans’ funds into his own digital wallet. The dinner itself attracted $148 million in contributions.

By describing the CLARITY Act as rushed and dangerously permissive, Waters criticized its lack of protections for investors and absence of penalties for bad actors. The bill was introduced on May 29 with Republican support and three Democratic co-sponsors. Its main goal is to define clear jurisdiction between the SEC and CFTC, but it also ignited partisan debate over its implications. Waters and other Democrats called for a closer examination of Trump’s crypto ties, particularly those connected to his family-backed platform, World Liberty Financial.

On the other hand, Committee Chair French Hill defended the bill’s intent by arguing that the current lack of federal oversight for digital assets is stifling innovation and creating confusion for investors. Still, none of the expert witnesses—including former CFTC Chair Rostin Behnam, former SEC Commissioner Elad Roisman, and Uniswap Labs' legal chief Katherine Minarik—touched on Trump’s involvement in their opening remarks.

Former CFTC Chair Timothy Massad, however, directly addressed the issue by saying Trump’s crypto dealings cast a “taint” on the entire industry and pose national security concerns. He questioned whether the president’s actions were aligned with national interests or personal gain.

Waters’ bill

Waters already introduced a separate bill aiming to bar the president, vice president, and members of Congress from participating in crypto ventures. That legislation came on the same day as Trump’s meme coin dinner, during which the president spoke from a podium bearing the presidential seal—despite claims it was a personal event.

Overall, as both the CLARITY Act and the GENIUS Act continue to move through Congress, Democrats are still very hesitant to support any bill that fails to address the growing concerns over Trump’s influence on the digital asset space.

Trump-Musk Feud Triggers Bitcoin ETF Outflows

Just how much influence Trump and his actions have on the crypto market is becoming more and more clear. Bitcoin exchange-traded funds (ETFs) in the United States experienced a sharp downturn as market sentiment soured after a very public fallout between President Donald Trump and Elon Musk. 

Bitcoin ETF flow (Source: Farside Investors)

After briefly recovering on June 3 and 4, US spot Bitcoin ETFs suffered outflows totaling $278 million on June 5. This is according to data from Farside Investors. The shift coincided with the Cryptocurrency Fear & Greed Index flipping from “Greed” to “Fear” on June 6, which proves that there is growing investor anxiety over the high-profile feud. The falling sentiment extended beyond the crypto market, with Tesla shares dropping 14% and Trump Media shares falling 8%.

Crypto Fear and Greed Index (Source: Alternative)

Bitcoin ETFs were under some pressure after cumulative outflows of $1.2 billion from May 29 to June 2, despite the short-lived recovery earlier in the week. On June 5, no US Bitcoin ETF recorded inflows, with ARK Invest’s ARK 21Shares Bitcoin ETF leading the outflows at $102 million. Globally, Bitcoin exchange-traded products saw $8 million in outflows over the past week.

In contrast, Ether ETFs continued to show resilience. On June 5, US spot Ether ETFs brought in $11.3 million in inflows, extending a 14-day streak. Although, this was still a sharp decline from the previous two days, which saw inflows of $56.9 million and $109.4 million, respectively. 

Ethereum ETF flows (Source: Farside Investors)

Ether ETPs have drawn investor interest thanks to improving Ethereum network fundamentals and strength in ETH futures markets. In fact, BlackRock even purchased $50 million worth of ETH on June 3.