Insiders of MELANIA memecoin Allegedly Earn Over $150 Million, Including Pre-Sale Transactions
An analysis indicates that a select group of traders reaped close to $100 million in profits shortly after the MELANIA token launched on the market.
Allegations of insider trading
On-chain evaluations reveal that around 24 digital wallets bought $2.6 million worth of these tokens in under three minutes before Melania Trump’s announcement regarding the coin on Truth Social on January 19.
This quick uptick in prices allowed for rapid sales, with nearly 81% of transactions occurring within 12 hours.
The introduction of the MELANIA token followed the launch of the TRUMP coin, which occurred just two days earlier and lacked similar pre-launch activities. Unlike the TRUMP coin, which traded almost immediately after its announcement, the advanced actions surrounding MELANIA underscore the risks tied to launching memecoins.
These tokens, which primarily serve speculative purposes aside from offering a dinner with the president, are currently exempt from regulations governing securities. According to the SEC’s present stance, transactions of this nature do not fall under federal insider trading laws.
The wallets that gathered MELANIA tokens prior to the official launch have attracted scrutiny due to their potential connections to Texas crypto entrepreneur Hayden Davis.
Davis, who has been linked to the contentious LIBRA token associated with Argentina’s President Javier Milei, asserted in a conversation with journalist Stephen Findeisen that he did not profit from the MELANIA release, claiming, “There was no money made from the Melania team. Zero.”
Nonetheless, a blockchain investigation identified early purchases linked to accounts associated with Davis’s business endeavors.
Those managing the MELANIA launch, operating under MKT World LLC based in Delaware, have reportedly withdrawn $64.7 million from initial sales and fees, which is separate from the $99.6 million garnered by early traders.
MKT World, which Melania Trump has utilized for various projects since 2021, has not yet provided specific information about its role or profit distribution framework. The First Lady has not made any public statements regarding the token’s market behavior or governance matters.
Melania Trump and the cryptocurrency landscape
Market fluctuations surrounding MELANIA have been marked by prior controversies and trading surges associated with tokens linked to the Trump family.
In the first day following the start of futures trading, the combined trading volume for TRUMP and MELANIA surpassed $50 billion, with the MELANIA-USDT open interest experiencing a 56% increase within a brief 90 minutes. Solana’s network faced challenges due to the high transaction volume, which amounted to 10 million transactions and $1.25 billion in total, while services like Phantom and Coinbase experienced restrictions due to congestion.
In the weeks that followed, wallets associated with developers were identified selling over 31 million MELANIA tokens through unilateral liquidity provision, leading to a sharp decline from a peak of $13 to $0.38, although a slight recovery did occur thereafter.
Moreover, past endeavors involving Melania Trump’s digital projects have been scrutinized for issues such as wash trading linked to her “Head of State” NFT in 2022, as well as a philanthropic NFT initiative from 2024 aimed at foster care programs.
The rapid and profitable trading around MELANIA further emphasizes the volatility associated with politically affiliated tokens.
Reports have suggested that similar wallet behaviors were present during the LIBRA controversy, indicating a recurring tactic of capitalizing on the visibility of prominent figures for cryptocurrency speculation.
Ethical questions have also been raised, with former CFTC chair Tim Massad criticizing the involvement of presidential families in commercial tokens as “plainly wrong” due to potential conflicts of interest.
As of May 5, the price of MELANIA had stabilized at around $0.32, valuing the 800 million tokens held by organizers at roughly $260 million.
The token’s unlocking schedule commenced on February 19, releasing 3% of the total supply, with planned monthly distributions of 2.25% thereafter.
Despite gaps in regulation and the anonymity provided by blockchain technology, this situation highlights the increasing intricacies surrounding political branding in digital currencies and the difficulties retail participants face in dynamic crypto markets.
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