jakiro
author:TaxDAO
On January 18, US President-elect Donald Trump announced the launch of his exclusive cryptocurrency meme coin $TRUMP via social media.This news instantly ignited the cryptocurrency market.The market value of $TRUMP exceeded US$24 billion on the first day of its issuance, becoming a well-deserved market focus.From ordinary investors to senior traders, almost everyone has shown great enthusiasm for this meme coin with a strong Trump personal touch.
meme coins are a cryptocurrency designed based on Internet culture, and its characteristics are high in entertainment and viral communication.Meme coins are usually based on hot people or events, attracting investors’ attention, emphasizing market sentiment rather than actual economic functions.From the early Dogecoin ($Doge) to the recent $Pepe, the rise of these meme coins has always been inseparable from the public’s “speculation carnival”.The $TRUMP issued by Trump this time has made the entire meme currency market reach a new high with its strong personal brand effect and its unique combination with political factors.
Trump personally enters: once again sends positive signals to the crypto market
According to a statement from the Trump team, the release of $TRUMP is intended to “eliminate a leader who does not retreat in adversity.”This meme coin not only focuses on Trump’s political image, but also integrates his experience of being assassinated in the 2024 election campaign, further arousing the emotional resonance of the market.Combined with Trump’s commitment to supporting the cryptocurrency market, investors are full of expectations for the future of $TRUMP.
Previously, meme coins related to celebrities were not uncommon, and $Doge was ranked among the top ten in this bull market because of its close ties with Musk.The most special thing about $TRUMP is that it is a meme coin issued directly by Trump as president-elect, which is a pioneering move in both the cryptocurrency market and in the political arena.From repeatedly promising to implement a series of policies that are conducive to cryptocurrencies during office, to participating in investing in a variety of mainstream cryptocurrencies, to issuing related NFTs and issuing VC currency $WLFI (World Liberty Financial Coin), Trump and his family are paying attention to the issue ofThe participation in the crypto market continues to deepen.The issuance of $TRUMP means that Trump chose to adapt to the meme coin craze and enter the market to play in person as the president-elect and the most down-to-earth way.As the first president to issue meme coins, Trump has injected his political influence directly into the meme coins market with this unconventional behavior, which not only directly demonstrates his high recognition of cryptocurrencies, but also can help cryptocurrencies further”Going out of the circle” has attracted more attention and funds, and has sent positive signals to the crypto market in terms of policy prospects and liquidity.
From carnival on the chain to rational reflection
However, behind this meme coin carnival is not only wealth effect and political signals, but also complex compliance risks.At a time when cryptocurrencies are increasingly receiving attention from governments, Trump’s move is undoubtedly to push cryptocurrencies directly into the spotlight for scrutiny.
Regarding securities regulatory risks, a key question is: Does this meme currency belong to a securities?This is an important factor affecting its legitimacy.In the United States, cryptocurrencies issued through ICOs are considered securities and need to be strictly regulated by the SEC.In the United States, the Securities and Exchange Commission (SEC) usually determines whether an asset constitutes a securities based on the Howey Test.The test includes four elements: investment of money, expectation of profits, common enterprise, and efforts from others only.The core feature of ICO is to publicly raise funds by issuing cryptocurrencies and promise some future returns.Judging from the current situation, although the Trump team issued $TRUMP publicly and obtained the purchase of investors, it has stated on the official website of $TRUMP that the cryptocurrency does not belong to securities and has not promised future profit possibilities, therefore, it is difficult to identify $TRUMP as a securities.However, the SEC’s attitude towards meme coins has not been clarified. If the actual performance of $TRUMP has securities characteristics, it may still be investigated and regulated by the SEC.
The second is tax compliance issues.Capital gains from investing in cryptocurrencies are considered taxable income under the U.S. Revenue Service (IRS).The 80% TRUMP held by Trump’s team will be unlocked in batches over the next three years, which poses a significant challenge to its tax compliance.First, it is worth noting whether $TRUMP unlocking constitutes a taxable event.The U.S. tax law stipulates that capital gains tax liability will only be triggered when an asset is disposed of.Therefore, cryptocurrency unlocking itself is not usually considered a taxable event unless the cryptocurrency is sold or used as a transaction.Once cryptocurrencies are traded on the market or converted into other assets, capital gains are calculated and taxes are paid based on the market price at the time of transaction.After $TRUMP is unlocked, how to determine its cost basis is another tricky question.In U.S. tax laws, capital gains tax is calculated based on the cost basis of the asset, that is, the price at the time of purchase.But as $TRUMP’s price fluctuates dramatically, determining the cost basis of cryptocurrencies can be very complicated.Especially if the Trump team chooses to sell these cryptocurrencies in batches, the time and market price of each transaction will affect the calculation of their capital gains.If the details of each transaction are not properly documented, this can cause great trouble for tax filing.
In addition, the issuance of meme coins may also cause controversy over political donations.In the United States, the Federal Election Commission (FEC) has strict transparency requirements and limits on political donations.If $TRUMP is used as a tool to raise political funds, it is very likely to circumvent existing regulatory frameworks and touch the legal red line.At present, although there is no conclusive evidence that companies or individuals will purchase $TRUMP as a way to contribute, the behavior of such politicians in issuing meme coins and obtaining high profits may still seriously impact the existing political donation order in the United States.Trump may also be suspected of disguised corruption.It is worth noting that Trump’s choice to issue coins before taking office may be to avoid the outside world’s accusations of his use of public power and monetization of power.But even so, this issuance of coins may have many negative effects, especially once the currency price drops sharply, Trump’s political credibility may suffer a heavy blow.
Summarize
Trump’s behavior of launching $TRUMP is undoubtedly a bold experiment with both political significance and market influence, but this is exactly in line with his self-shaped political image.Judging from the market performance, $TRUMP successfully ignited investment enthusiasm in a short period of time, attracted countless attention to meme coins, and had unprecedented influence.However, in the face of FOMO and FUD, people should still remain rational, paying attention to both the economic risks of investment behavior and their legal and compliance risks.After all, the premise of “Suha Meme staying in the palace” is to stay on the court.
