By Michelle Conlin
NEW YORK (Reuters) -Democratic Senator Elizabeth Warren asked the U.S. Securities regulator on Friday to share its plans for regulating exchange-traded funds due to be launched by a company founded and majority-owned by President Donald Trump.
“All SEC decisions and actions involving (Trump Media & Technology Group) and President Trump’s financial interests should be carefully managed to ensure that they are free from undue political interference and influence from the President and his administration,” Warren said in a letter sent to Commission Chairman Paul Atkins seen by Reuters.
The senator, the ranking member of the U.S. Senate’s banking committee, requested, also, that Atkins preserve all communications regarding the deal between the president’s Trump Media & Technology Group and a cryptocurrency firm to host the ETF and other investment products, some of which will include digital assets. Warren told Atkins that Trump Media’s recent announcement of a proposed sale of investment products that require the SEC’s regulatory approval represents an “extraordinary conflict of interest” in which a sitting president is asking an agency he controls “to approve investments he controls.”
The president, Warren said, “has attempted to assert his dominance over decision-making at independent agencies like the SEC.” The letter, which cites reporting by Reuters and other news outlets, comes three weeks after Democrats requested that the SEC preserve records related to Trump’s new cryptocurrency project, World Liberty Financial, to “help us better understand the extent to which the Trump family’s financial interest in World Liberty Financial may be influencing your and the Commission’s activities.”
When asked about the Democrats’ earlier letter to the SEC about World Liberty, a White House spokesperson said in an emailed statement on April 2 that “President Trump’s assets are in a trust managed by his children. There are no conflicts of interest.”
PIVOT TO CRYPTO DRAWS SCRUTINY Given that Republicans have majority control of both the U.S. House and Senate, the Democratic Party has limited ability to call for public hearings or formal investigations. Warren’s letter does not cite any legal authority that would compel the agency to honor her requests. It requested a response by May 2. Trump Media’s pivot to crypto is the latest in a series of moves by the Trump family to open multiple beachheads in the industry at the same time as the president has promised to usher in a “golden age” for digital assets by easing enforcement and regulations. Those developments have drawn scrutiny from government ethics watchdogs because they come at a time when the president’s family stands to profit from his official decisions. Since Trump was elected, the Trump family’s new crypto ventures have earned them hundreds of millions of dollars in fees alone.
The Trump Organization said in January that the president’s investments, assets and business interests would be held in a trust managed by his children and he would play no role in day-to-day operations or decision-making. The family’s business also retained an attorney to serve as an ethics adviser to “avoid any perceived conflicts of interest.”
On April 22, President Trump’s social media firm, Trump Media & Technology Group, said it had reached a binding agreement with Crypto.com and Yorkville America Digital to roll out an array of retail investment products, including crypto, in its latest bid to diversify into financial services. The Trump family’s stake in Trump Media – it owns about 60% of the company’s stock – is now valued at $3 billion. Unlike the broader stock market, which has suffered steep losses amidst the President’s trade war, Trump Media shares have risen 40% since April 2, when Trump announced his sweeping plan for steep tariffs with other countries.
(Reporting By Michelle Conlin. Editing by Tom Lasseter and Aurora Ellis)
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