One problem that promoters of cryptocurrencies have faced since the asset class first emerged is that its reputation stinks.

Crypto trading has become identified by regulators and in the public mind as a haven for scams, theft and other forms of sharp practice.

One problem that promoters of cryptocurrencies have faced since the asset class first emerged is that its reputation stinks.

The crypto trading has become identified by regulators and in the public mind with a haven for scams, theft and other forms of sharp practice. The FBI, in its most recent annual report on cryptocurrency, found that crypto-related fraud has exploded. Criminality is “pervasive” in the field, the agency warned.

The elusive use case for crypto assets appeared to have been narrowed down to facilitating criminal fraud, ransomware attacks, drug and human trafficking.

Then came Donald Trump. During the presidential campaign and after his election, crypto promoters thought they were entering the nirvana of officially recognised legitimacy.

Trump signaled that he would end government regulatory initiatives on crypto, “in order to promote United States leadership in digital assets and financial technology while protecting economic liberty,” to quote the executive order he issued Jan 23, effectively wiping out federal regulations on the class.

Things aren't working out as they hoped. Since Trump returned to the presidency, his and his family's involvement in crypto-related deals has critics charging that crypto has become an entirely new path for official corruption and conflicts of interest in the White House.

"Trump's cryptocurrency ventures are nothing more than a fig leaf for payoffs from foreign nationals & foreign gov'ts," Sen. Richard Blumenthal, D-Connecticut, asserted in a May 7 tweet, the subject of which was an offer of a sit-down private dinner with Trump.

The price of the coin soared to about $74 on Jan 19, the day before Trump's inauguration. It immediately fell in value, though its price has been propped up by the offer of the dinner and tours; the most recent quotes place it at about $13. The top 220 holders of the Trump coin, who are entitled to the dinner, spent nearly $148mil for the privilege, according to an estimate by Reuters.

More than half of the biggest holders appear to be foreign entities, according to an analysis by Bloomberg. That implies that the purchases might be designed to circumvent federal law barring foreigners from making political contributions in the US.

Democratic Sens. Adam Schiff of California and Elizabeth Warren of Massachusetts demanded that the federal Office of Government Ethics, an independent executive branch agency, open an inquiry into the "severe risk that President Trump and other officials may be engaging in 'pay to play' corruption by selling presidential access to individuals or entities, to include foreign nationals and corporate actors with vested interests in federal action, while personally enriching the President and his family."

DWF, a crypto firm based in the United Arab Emirates, announced last month that it had bought $25mil in coins issued by the Trump-affiliated firm World Liberty Financial, in part to "enhance regulatory engagement with US policymakers." Freight Technologies, a Houston logistics company, announced April 30 that it had borrowed $20mil to buy Trump coins, calling the transaction "an effective way to advocate for fair, balanced, and free trade between Mexico and the US."

The unease has spread to Republicans on Capitol Hill, who fear that the Trumps' crypto deals will undermine their efforts to enact crypto-friendly regulations.

"This gives me pause," said Sen. Cynthia Lummis, R-Wyoming, a leader in the legislative movement to pass a pro-crypto law. "Even what may appear to be 'cringey' with regard to meme coins, it's legal, and what we need to do is have a regulatory framework that makes this more clear, so we don' برابر