← The Ezra Klein Show
The Ezra Klein Show
The Growing Scandal of $TRUMP
01:03:17
Steve Bannon famously talked about using “muzzle velocity” as a strategy: doing so much so quickly that you overwhelm the ability of the media to cover it. I think what the Trump family is doing with crypto is muzzle velocity for corruption. What they’re doing isn’t necessarily illegal. It would be if these were official campaign donations; the sums involved are so large, and the buyers include foreign nationals. But the Trump family is making this money personally. And they’re doing it across so many different crypto ventures, it’s almost impossible to keep track. So that’s what I wanted to do with this episode: try to track at least some of it. The person I’ve enlisted to help me out is Zeke Faux. He’s the author of the fantastic book “Number Go Up: Inside Crypto’s Wild Rise and Staggering Fall” and an investigative reporter at Bloomberg, where he’s been covering many of these strange Trump family crypto schemes. This episode contains strong language. Mentioned: “Trump Cryp...
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- [00:00]
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- [00:29]
Donald Trump
SA.
- [01:02]
Ezra Klein
Last week, the Trump administration formally accepted a Boeing 747 luxury jet from the government of Qatar. This is, if you've not seen it, a very nice plane. Very nice plane. And Trump's plan at the end of his term is to donate this very nice plane to his own presidential library. Because as you know, no presidential library, no library really is complete without a luxury airplane. Even if this is legal, the conflict of interest here is obvious. It is incredibly corrupt looking at the very least. But here's the thing. Usually something like this I think would come with a cover up. With Trump, there's never a cover up.
- [01:48]
Donald Trump
They're giving us a free jet. I could say, no, no, no, don't give us, I want to pay you a billion or 400 million or whatever it is. Or I can say thank you very much.
- [01:59]
Ezra Klein
People are supposed to be hiding what they're doing. When it happens just out in the open like this, I think it becomes hard for a political system, even for the media, to know what to do with it. But the biggest area of corruption for the Trump family right now, the soft underbelly I think of this administration, is not airplanes, it's crypto.
- [02:19]
Zeke Fox
President Trump and his family's growing crypto empire. Trump is a stakeholder in something he also is a chief regulator of.
- [02:25]
Ezra Klein
And the Trump family is indeed cashing it. Chinese billionaire Justin sun publicly disclosed a $75 million investment from a $2 billion deal with a foreign government. Pakistan becoming the latest to partner with the world Liberty Financial.
- [02:40]
Zeke Fox
World Liberty Financial.
- [02:41]
Ezra Klein
World Liberty Financial. The Donald Trump meme coin, which now has a value of about $2.5 billion. A high powered dinner for a price looking to become the country's largest bitcoin miner. Its own dollar peg stablecoin USD1.
- [02:57]
Zeke Fox
This is unprecedented and I think it's going to change our modern financial system forever.
- [03:03]
Ezra Klein
Steve Bannon famously talked about using muzzle velocity as a strategy, doing so much so quickly that you overwhelm the ability of the media to cover it. What the Trump family is doing with crypto is muzzle velocity for corruption. There are all these different companies and coins. It is almost impossible to keep track. So that's what I wanted to do with this episode, try to track at least some of it. And the person who's going to help me out is Zeke F. He's an investigative reporter at Bloomberg, the author of the fantastic book number Go Up Inside Crypto's Wild Rise and Staggering Fall. And he's been reporting on many of these crypto projects. As always, my email Ezra kleinshowytimes.com Zeke Fox, welcome to the show.
- [03:55]
Zeke Fox
Thanks, Ezra.
- [03:57]
Ezra Klein
So let's start back in July 2019. This is late in the first term and you have Donald Trump tweeting as president. I am not a fan of bitcoin and other cryptocurrencies, which are not money and whose value is highly volatile and based on thin air. So tell me about the Trump administration's first term in terms of its relationship with crypto.
- [04:21]
Zeke Fox
Yeah, that was pretty much his attitude whenever he was asked about crypto. It hadn't yet entered the mainstream, the crypto Super Bowl. And we saw all these ads for Sam Bankman Fried's FTX. We had LeBron James endorsing crypto. That was 2022. It seemed like kind of a fringy thing for nerds. There's another time that he called bitcoin a scam against the dollar. And during slightly view the whole second.
- [04:52]
Ezra Klein
Trump administration as a scam against the dollar. But that's a different situation maybe.
- [04:58]
Zeke Fox
And he staffed his first administration with a lot of mainstream Wall street people who viewed crypto as this kind of unregulated threat to the financial system. So at that time, the securities and Exchange Commission under Trump initiated some lawsuits against big crypto companies, some of the same ones that they were still fighting and angry about years later.
- [05:26]
Ezra Klein
You mentioned 2022 and this big cultural boom we have in that era. And this is the moment of NFTs are everywhere. And you have Matt Damon doing these ads and Larry David telling you not to miss out. And this is when something begins to change for Donald Trump. He's out of office. There's some reporting that his cash flow situation is not what he would like it to be. And he releases a series of Trump digital trading cards. What are Trump digital trading cards?
- [05:56]
Zeke Fox
Yeah, so the technical term for these are NFTs, or non fungible tokens. You might remember, if you remember any of these, the Bored Ape Yacht Club. These were like really ugly cartoons of monkeys that sold for three or four hundred thousand dollars for a couple of months there. And after NFTs had pretty much crashed, Trump came in out with his own series. And these are digital pictures of Trump looking super jacked. In some he's an astronaut, and others he's a hunter. And this was an idea that.
- [06:37]
Ezra Klein
So funny.
- [06:38]
Zeke Fox
Yes.
- [06:38]
Ezra Klein
Can you imagine releasing a series of commemorative cards about yourself that are not just pictures of you, but pictures of you looking tougher and more heroic and more jacked?
- [06:50]
Zeke Fox
I'm going to make this worse now. So this was an idea pitched to him by Bill Zanker, who used to run the Learning Annex and co authored Think Big and Kick Ass with Trump. So they go way back. And Bill Zen had actually been working with Sylvester Stallone on a NFT collection that was going to be called Planet Sly. It didn't happen. And it looks like they reused the Planet Sly art for the Trump NFTs. So you got Trump in all these, like, Stallone poses. It costs $99 to own one. And when you buy an NFT, you don't own the picture in the sense that, like, no one else can use it, no one else can look at it. You just have registered your ownership of this card on the blockchain. You can prove that you are the one who paid $99 to buy this image of Trump looking really jacked. And then you could go sell it to someone else, and they would then be registered as the owner on the blockchain. That's what makes it crypto. And they released about 200,000 of them, and Trump and his partners made an estimated 20 million bucks.
- [07:59]
Ezra Klein
20 million bucks is not nothing for an incredibly cheap project.
- [08:05]
Zeke Fox
Yes. And he's endorsing a lot of stuff at this time. Right. He went on to do, I think, Bibles. Yeah.
- [08:13]
Ezra Klein
So Trump Bibles, sneakers, Trump commemorative coins.
- [08:16]
Zeke Fox
Yes.
- [08:16]
Ezra Klein
But this is a little bit benign. This is not a currency. It is what it says it is. You can buy these Trump digital images and you have proof of ownership. It's just a money making scheme.
- [08:32]
Zeke Fox
Yeah. And he held a couple events at Mar a Lago to celebrate this collection. And he invited people who had bought a certain number of the cards. And at these events, you know, he sounded a little bit more. More friendly to crypto.
- [08:51]
Ezra Klein
What kinds of people are coming to these events? So are the people buying enough of these cards crypto magnets who recognize they can get an audience with Donald Trump, or are these just rando maga diehards who want, like a cheesecake calendar of their hero?
- [09:10]
Zeke Fox
It was more randos, but There were a few crypto guys who either thought that this was funny and that it would be cool to go to Mar a Lago. It didn't cost that much to buy enough to get in. It was maybe $10,000 worth of cards.
- [09:26]
Ezra Klein
And so what happened to this dinner?
- [09:28]
Zeke Fox
There's lots of questions about crypto. People are taping this. So the stuff he said came out later. And it's clear that Trump, he's sounding more positive, but it's clear that he doesn't entirely have the subject down yet. For example, someone asks him about central bank digital currencies. This is something that crypto guys hate. They don't want the government to get into the crypto business and compete with them. And Trump says, oh, that could be interesting. When, like, the right answer would be, oh, I hate it. That's a Democrat thing. I'm going to ban those. But he says, generally about crypto, he says, more and more, I'm for it.
- [10:07]
Ezra Klein
And there's something else going on at the same time. Joe Biden is president. Gary Gensler is his SEC chair. Gensler's a huge skeptic of crypto. He wants crypto regulated as securities, for the most part, which crypto people hate. What is the relationship at this point between the crypto world and the Biden administration?
- [10:27]
Zeke Fox
I think it's helpful to take a step back and think for a minute about what is happening in crypto, because if you've never really thought about it too much, you might think about crypto as some sort of alternative to the dollar, like a currency we're going to use to buy our coffee or pay for our house or whatever. Bitcoin's now been around for 15 years. It's as old as Uber WhatsApp, things that we use every day. That hasn't happened. What has happened is that people have made thousands, maybe even millions, of random coins that do all sorts of different things that people can gamble on. And tons and tons of these coins have turned out to be scams. So the Biden administration, as this insane bubble inflated, didn't really take a lot of action. Once the bubble popped and people started losing a lot of money. Gensler's SEC sued many of the biggest players in crypto and said, hey, the thing that you've been doing out in the open for the last couple years, letting people gamble on all these coins, it's illegal. These are securities. They should be registered with us. They should be regulated like we regulate stocks. And by allowing people to trade them, you've broken the Law. And he's saying, you basically have to stop now. They didn't stop. They're fighting the lawsuits. But Gensler became the industry's big enemy. And some in the industry realized that maybe they needed to get more involved in politics, that maybe some lobbying could help their cause.
- [12:11]
Ezra Klein
And these are people now with a lot of money. One thing that always fascinates me about the crypto folks is that their money went from, in many cases, pretty modest to billions so fast that they treat it like play money, because to them, it really does have this abstracted quality. You know, in politics, it's a big deal if a donor comes in with a million dollars, $10 million, $20 million, $30 million is a whale, right? If there's a donor in industry willing to do $30 million. Politicians fall over themselves to get in front of that. Tell me a bit about the financial artillery that the crypto titans begin bringing to bear here.
- [12:54]
Zeke Fox
So Sam Bankman Fried, he once said, people say there's too much money in politics. I'm actually surprised by how little there is. I mean, these politicians control huge sums of money. It's worth spending what he views as a little bit to try to influence them. So some other guys get this idea. And the one who I think is the most influential and kind of underappreciated is. Is David Bailey. He's the chief executive officer of Bitcoin magazine. This is like a glossy publication for people who really like bitcoin. And he got together with a couple friends and they started to strategize, how can we get bitcoiners in front of the president? How can we get the president on our team? The real goal is how do we get Trump to come to our bitcoin conference, which they have every year. And it's like a big rally where tens of thousands of bitcoiners come in. Now, bitcoiners are a little different from crypto writ large. These guys think that bitcoin is the one true coin. They might even think most of the other ones are scams. And they think that bitcoin's price is going to go to a million. It's going to solve all the world's problems, make us all really rich. So it turns out that one of David Bailey's friends has a connection to Paul Manafort, who had been Trump's campaign manager. They consult with him. They come up with a plan. And David Bailey actually described some of his lobbying on a podcast called Galaxy Brains. And this is what he said about approaching the Trump campaign Donald Trump.
- [14:45]
David Bailey
It's not about left versus right politics. As somebody at my company said the other day, it's like orange versus green politics. And Donald Trump is a vessel for us to let the game theory of bitcoin play out. And it has already generated dividends, and it is going to generate dividends that are hard to even comprehend or calculate over the next four years.
- [15:19]
Zeke Fox
What he decided was that he'd get a few bitcoiners and they would all max out, and the most you can give to Trump and then I guess a bunch of campaign committees totals $844,600. And what Bailey said that he realized is that even like 10 people who gave that much could have a huge impact. And he described in this podcast his goals, which sounded to me to be totally insane. He said that he wanted the US Government to start buying bitcoin, which would start an international race to acquire bitcoin and drive the price up to a million dollars per bitcoin.
- [16:00]
David Bailey
If we act together in unison, the price of bitcoin is going to the fucking moon. I mean, this is the type of when people say, what's going to send bitcoin to a million dollars of bitcoin? This is what sends it to a million dollars of bitcoin.
- [16:11]
Zeke Fox
He said this all before Trump came to the conference, which he did.
- [16:15]
Ezra Klein
Before I get to the conference, I want to note that goal for a second. There's an, as you mentioned, older, more idealistic view of crypto, that it's going to be new, untraceable, trustless currencies that will replace the things we use like dollars and yen to buy things. Now, I think that concept has sort of fallen by the wayside. Your great book, which I love and recommend to people, number Go up, is all about the embrace of the idea. The point here is more people buy in and then the number go up. Yes, but for that to keep happening, you need more people to keep buying in. One way you could do that is mass scale advertising. You're paying people like Matt Damon and Larry David and supermodels and Tom Brady to advertise your crypto platforms to kind of get dumb money in. But the biggest money is government money. And if you could put government money and putting a lot of government monies into a scarce financial product, by definition, you have driven up the price of that product for everybody, owning it beforehand by a lot. In some ways, it's a completely insane place for the original anti government bitcoin idealists to end. But if all you want to do is make number go up. It'd be pretty sweet, right?
- [17:30]
Zeke Fox
I mean, it's helpful to, like, picture a pyramid. Maybe at the top are the early adopters, the nerds, the anarchists, the ones who wanted untraceable money. But, like, by this time, the pyramid's getting pretty big. You've brought in the dumb money. You've got Bitcoin ETFs that let people invest in Bitcoin through their IRAs. How are we going to keep making number go up? The base of the pyramid is really wide. We need giant pools of money, governments, to buy bitcoin.
- [17:59]
Ezra Klein
All right, so they do get Donald Trump to come to the 2024 Bitcoin conference. You're at this conference, right?
- [18:06]
Zeke Fox
Yes.
- [18:07]
Ezra Klein
What's the vibe?
- [18:09]
Zeke Fox
First off, I thought, okay, maybe he'll do it by video. He'll say, hey, bitcoiners, you know, have fun, great conference, whatever. Then it became clear he was coming. I thought he'd just run through the greatest hits. We'd get a speech about crooked Hillary. Maybe he mentions bitcoin once. No. When he took the stage at the end of the conference, he ran through everything that David Bailey had said he was going to do.
- [18:35]
Donald Trump
Bitcoin is going to the moon, as we say it's going to the moon. I want America to be the nation that leads the way, and that's what's going to happen.
- [18:44]
Zeke Fox
And he said that he did not want China to get the crypto because.
- [18:49]
Donald Trump
If we don't do it, China's gonna be doing. Others are gonna be doing it. Let's do it and do it right.
- [18:55]
Zeke Fox
Which is kind of funny. China has basically banned crypto. But David Bailey had suggested that a good way to get Trump on board would be to suggest that there was some sort of competition with China. He said he would fire Gary Gensler and end the war on crypto.
- [19:10]
Donald Trump
I will fire Gary Gensler and appoint a new SEC chairman.
- [19:18]
Zeke Fox
And the applause was so loud. They said it again.
- [19:21]
Donald Trump
Let me say it again. On day one, I will fire Gary Gensler. Whoa.
- [19:35]
Ezra Klein
There's a funny dynamic to his speech. In some ways, this is one of those Trump speeches that I think even people who don't like him enjoy watching because he's doing this thing where he's reading words on a page or on a teleprompter that it feels like he has never read or thought about. But he's offering his own color commentary along the way. I want to play a clip from it.
- [19:57]
Donald Trump
In just 15 years, Bitcoin has Gone from merely an idea posted anonymously on an Internet message board to being the 9th most valuable asset anywhere in the world. Can you believe that? Is that right? That's a big deal. Think of that. It's already bigger than ExxonMobil. Soon it will be surpassing the entire market cap of silver. It's not bad. How about gold? How about gold? Let's go gold.
- [20:31]
Ezra Klein
So when I hear this, I don't hear a lot of conviction in Donald Trump. What I hear is somebody who is figuring out who's been told what an audience wants them to say. He is himself a little bit surprised by what he's saying. And he's here in the crowd.
- [20:49]
Zeke Fox
And just before he came on stage, they'd held the fundraiser. And there was another part that I noticed that he seemed to be kind of freestyling, which came at the end.
- [21:00]
Donald Trump
With your help, we will save our nation, we will restore a republic, and we will make America and bitcoin bigger, better, stronger, richer, free, freer, and greater than ever before. Thank you all. Have a good time with your bitcoin and your crypto and everything else that you're playing with. And we're going to make that one of the greatest industries on earth. Good luck and God bless you all. Thank you. God bless you. Thank you.
- [21:28]
Ezra Klein
This is a very famous final moment. What did the room make of that?
- [21:32]
Zeke Fox
Ending the speech that way made it kind of clear that he didn't view this as a serious thing. Because this bitcoin conference audience, you cannot overstate how obsessed with bitcoin they are. And it's not something to joke about for them. They were not thrilled, but that's just because they're totally insane. They wanted him to say, like, the dollar will be illegal. It will be only bitcoins. Now they're a tough crowd to please.
- [22:24]
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- [22:54]
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The New York Times app has all.
- [22:56]
Ezra Klein
This stuff that you may not have seen.
- [22:57]
Zeke Fox
I can immediately navigate to something that matches what I'm feeling. The way the tabs are at the top with all of the different sections. It's just easier to navigate that way. There is something for everyone. The personalized page, the utep, that one's my favorite.
- [23:11]
Ezra Klein
I can also save my articles easily.
- [23:14]
Zeke Fox
In this area right under the byline it says click here if you'd like to listen to this article.
- [23:18]
Ezra Klein
I like that the cooking tab on.
- [23:20]
Zeke Fox
Top is really easily accessible.
- [23:22]
Ezra Klein
So if I'm on my way home and I'm just thinking, oh, what am I gonna make for dinner? I'll just quickly go on to cooking and say, oh, I've got this in my pantry.
- [23:30]
Zeke Fox
I'm gonna try out some of these recipes I see in here.
- [23:32]
Ezra Klein
I go to games, always doing the.
- [23:34]
Zeke Fox
Mini, doing the wordle. I loved how content it exposed me to things that I never would have thought to turn to a news app for this app is essential.
- [23:43]
Ezra Klein
The New York Times app, all of the times, all in one place.
- [23:48]
Zeke Fox
Download it now@nytimes.com app.
- [23:56]
Ezra Klein
So I think right now we're tracking a pretty normal political story. There's this industry, it's got a bunch of money. It's. It's willing to give a bunch of money to candidates if those candidates support its goals. The candidates want money in order to be able to run their political operations. And it's a pretty normal story. But then in September 2024, now we're just two months out from the election, the Trump family announces something new, that they're going to be starting something, or they're heavily involved in something called World Liberty Financial. What at that point did they say World Liberty Financial was?
- [24:35]
Zeke Fox
The Trump sons first started tweeting about it, saying this was the future of finance. And Trump himself said, we're embracing the future with crypto and leaving the slow and outdated big banks behind. And reading between the lines, it seemed like they were saying they were going to release some sort of platform for borrowing and lending. Crypto. There's a million of these. There's really not some unmet need in the market. And crypto people, some of the same ones who had been really excited about Trump's embrace of the industry, were pretty mad. Not everyone, but a lot of people told me, this looks like a cash grab. This isn't what crypto's about, some sort of copycat project. And I thought this was pretty funny because to me, it seemed like Trump was kind of catching on to how crypto really works. Because in crypto, buying other people's coins is kind of for suckers. By the time you hear about the coin, the insiders have already Taken their positions at low prices. You're, you know what they call exit liquidity. They're going to sell it to you at a high price. That's how they make money.
- [25:53]
Ezra Klein
Exit liquidity is such a great name for that.
- [25:55]
Zeke Fox
The real way to make money in crypto is to make up your own coins and sell them to other people for real money. So to me, I'm like, okay, it seems like Trump's catching on.
- [26:05]
Ezra Klein
So tell me who's behind this, though there's some involvement of the kids. There's, I guess the son of Steve Wyckoff, who later becomes the Middle east envoy. Tell me, who is actually running World Liberty Financial, and how do the Trumps make money off of.
- [26:22]
Zeke Fox
Seemed like there were these two kind of longtime online hustlers who were the real movers behind the project. One of them, his name is Chase Hero. And dig into his resume. It's a spotty one. He has bragged about dealing weed. He used to sell weight loss colon cleanses online. He had a $149 a month get rich quick program. I watched him on Logan Paul's podcast where he promoted a crypto coin that later went down 96%. And he's pretty much an unknown in crypto. He'd only ever done one cryptocurrency project that I could find. It attracted a few million dollars and then suffered a big hack. I spent a long time watching all of his YouTube videos, of which there were many, and in one, he called himself the dirtbag of the Internet and said that regulators should, quote, kick shitheads like me out. Then he said a quote about crypto that, honestly, I kind of agree with, but make some kind of an odd business partner. In this video, he's streaming while he drives his Rolls Royce and he says you can literally sell shit in a can wrapped in piss covered in human.
- [27:43]
Ezra Klein
Skin for $1 billion if the story's right, because people will buy it. And that is what is going on in the crypto space. And like I said, my other video, I'm not going to question the. The right and wrong of all that. All I'm saying is, as a human.
- [27:56]
Zeke Fox
His business partner, who's also helping run World Liberty, Zachary Folkman, used to run a service called Date Hotter Girls, where he taught seminars about how to pick up women.
- [28:09]
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- [28:47]
Zeke Fox
So these are the Trump's crypto business partners. And I started looking into how this came to be, and it seems like what happened is that Chase Hero and Zach Folkman had met Steve Witkoff's son. Steve Witkoff is a real estate developer who golfs with Trump. Longtime Trump friend. And Steve Witkoff had introduced them to the Trump sons and Trump Sr. And they'd pitched him on this World Liberty plan. And Trump is listed on World Liberty's website as chief crypto advocate. And Eric Don Jr. And Baron are Web3ambassadors. And this is also par for the course in crypto World Liberty, they're not really quite saying exactly what it is, but they're going to sell some coins. And the World Liberty coins were even, by crypto standards, a really unappealing investment. So if you buy World Liberty crypto coins, you do not receive a share of any money World Liberty makes. You cannot resell them unless the rules change in the future and the first $30 million of the proceeds will be spent on.
- [30:08]
Ezra Klein
You can't resell them?
- [30:09]
Zeke Fox
No, they can't be resold.
- [30:10]
Ezra Klein
How do you make money off of them?
- [30:12]
Zeke Fox
Presumably, they're going to change those rules, but you're trusting that they do.
- [30:16]
Ezra Klein
But. So I buy a World Liberty coin. It cost me just notionally, whatever, 30 bucks, 300 bucks. There's no liquidity in that.
- [30:27]
Zeke Fox
Literally impossible to resell. Maybe you could do it over the counter to your friend with, like, a handshake deal, but you can't.
- [30:34]
Ezra Klein
So I'm actually shocked.
- [30:35]
Zeke Fox
Yes. And after this initial 30 million, 75% of all the money World Liberty makes, both from operations of whatever they will do in the future, and. And from the token sale, 75% is going to be paid to the Trumps as a fee.
- [30:51]
Ezra Klein
Okay. But initially, it doesn't make that much money.
- [30:54]
Zeke Fox
Yeah. So Trump's not president yet, and this offering is kind of rejected by the crypto industry. At first, they'd only sold a couple million of the coins. I mean, still not bad. You tweet a couple of times, you sell a couple million of coins that can't be resold, but it hadn't hit that payout level. Oh, true.
- [31:15]
Ezra Klein
But then comes Justin Sun. Who is Justin Sun?
- [31:20]
Zeke Fox
Justin sun is a controversial crypto billionaire born in China. He started a blockchain called Tron, and he is best known for his love of publicity stunts. He bought lunch with Warren Buffett to try to pitch him about crypto. He bought a seat on one of Jeff Bezos's spaceships, which I don't think he ever used. And most recently, he bought a piece of conceptual art, a banana taped to a wall, for $6 million. So Justin sun is facing a lawsuit filed by the SEC under Gary Gensler, and he comes in right after the election and buys $30 million of these unresellable World Liberty tokens, which pushes them over the line so that the Trumps would, in fact, receive a payout. And sun says at the time to my colleague that he just liked the project. He was not expecting anything from it. But he's immediately named an advisor to World Liberty, one of maybe 10 people in the industry who are. So now he's in business with the.
- [32:47]
Ezra Klein
Trumps, too, and he says publicly that he's triggered this payout to them. Is that accurate?
- [32:53]
Zeke Fox
He makes a lot of noise about the purchase, and the rules of the game are clear to everyone. And in case the Trumps did not know about this, just a few weeks later, he goes to a crypto conference in Abu Dhabi, also hosted by Bitcoin magazine's David Bailey and the Small World. Yes. At that conference, he is photographed with Steve Witkoff, the envoy who also plays a big role at World Liberty. He's now said he divested, but Justin sun gets in front of him there. We don't know what was said, but after that, maybe a few weeks later, Justin sun buys another $45 million of world liberties token, which at this point.
- [33:40]
Ezra Klein
Is now just doing a 75% payout to the Trumps, correct?
- [33:43]
Zeke Fox
Yeah. His purchase of World Liberty coins meant that the Trumps were going to get something like 56 million in a payout based on just what he bought, we should say. A few weeks after Justin's son finished buying his $75 million of world liberty tokens, his SEC case was put on hold and no explanation was given. The SEC did put a lot of other crypto cases on hold, but this is like, a very favorable outcome for him and one that is really valuable.
- [34:20]
Ezra Klein
Okay, so let's back up for a minute. You've got a crypto figure, but let's not call it a crypto figure. You've Got someone in the finance industry. They are under SEC investigation for fraud. And what they have done is they have found a way to put $56 million publicly and legally in the pocket of the family that is about to or just has won the election and will direct the SEC afterwards. I think somebody listening to this might say, isn't that usually illegal? Wouldn't that be understood under normal law as a bribe? I guess the question I'm asking you is, could Justin sun have just walked up to Eric Trump with a check? Could he have just gone to him and said, hey, I think you guys are great. I'm into the whole Trump project. I like the branding, I like the aesthetic, I like the vibes. I'm not saying I want anything from you. Here's $56 million of walking around money. Would that be legal?
- [35:33]
Zeke Fox
I'm not entirely sure. Maybe it would be. I mean, I think that the Emoluments clause only applies to payments from foreign governments. But I'm not an expert on this. To me, it seems like this is just not a situation that was ever contemplated by the people who made laws about what presidents could and couldn't do.
- [35:57]
Ezra Klein
What's funny is you couldn't do it for the campaign. You mentioned earlier that the max you could donate to the campaign directly into some associated official party organs is fairly limited. If you wanted to, say, put $56 million into Trump's official campaign account, you couldn't. But you can put it into his crypto coin, which triggers direct payments into his family's bank accounts.
- [36:23]
Zeke Fox
Yes. And I mean, remember, first. First time around, there was a lot of controversy over people spending money at the Trump Hotel in D.C. i mean, that looks quaint. That was a couple hundred thousand dollars, you know, now people are sending millions to buy, you know, Trump's coins.
- [36:43]
Ezra Klein
Tens of millions. The thing about the crypto play here is it's so much more scalable. The numbers, the number go up.
- [36:49]
Zeke Fox
Yes. And they ended up selling out. They sold all the tokens that they had offered, total of $550 million worth. So that meant $400 million to the Trumps. Based on the terms of the offering, as I read them, Eric Trump has.
- [37:05]
Ezra Klein
Said, quote, it's one of the more successful things we've ever done. Do we know who bought this $550 million of World Liberty Coins?
- [37:15]
Zeke Fox
So the way crypto works, you can hold your cryptocurrency in an anonymous wallet. You're only identified by a string of random letters and numbers. So we can go on the blockchain we can see which anonymous wallets have sent money to buy World Liberty Tokens, but we don't know who those people are unless there's other clues or if the people announce it publicly.
- [37:47]
Ezra Klein
So Justin sun was a little bit unusual here in that he went and made his purchase very public. But in theory, there could be somebody else, some financier in Saudi Arabia, some Latin American influence peddler who buys 50 million or 20 million or whatever it is, does not say anything publicly, but sends a signal message to somebody who knows the Trumps, saying, hey, can you let them know I did this, that I'm on their side, I believe in what they're doing, I want to help out for sure.
- [38:22]
Zeke Fox
And, I mean, you're giving me an idea. You could save 20 million bucks. Just tell them you did it. Be like, this is my wallet.
- [38:29]
Ezra Klein
Fair enough. All right, so let's go to a different moment here. Trump wins the election. Now, it's January 17, three days before Trump will be inaugurated as president for the second time. And the Trump family, I guess, announces, releases a meme coin. What's a meme coin? And what is Trump's meme coin? How does his work.
- [38:58]
Zeke Fox
So, crypto totally collapsed in 2022, but has since really recovered. And you might think that maybe it's recovered because they finally came up with a good use for crypto and now it's actually going to revolutionize finance. No, the thing that's really been popular in the last couple of years in crypto is meme coins. And what that means are coins that do not claim to ever do anything. So, like, dogecoin is kind of the original meme coin. It's just a picture of a dog. And you're going to buy it because you think other people will buy it and it might go up.
- [39:38]
Ezra Klein
Pure number go up. Technology.
- [39:40]
Zeke Fox
Exactly.
- [39:41]
Ezra Klein
Pure gambling.
- [39:41]
Zeke Fox
Yes. It's a new kind of gambling game. It's kind of like the gamestop bubble on the stock market. It's like a pump and dump scheme, but it's consensual. The people involved know what they're doing. We're all going to pump up this coin, and we all think we're the ones who are going to get out at the top before it inevitably collapses. And the only person who's really guaranteed to make money is the person who created the coin. It costs them nothing. And then anyone that they told about it who's able to get in, you know, in the first minutes when the. When the price is low. So before Trump, this Was mainly something that kind of like C list celebrities did. Caitlyn Jenner, Iggy Azalea, Hayley Welch, who was famous from that Hawk Tua video, they would release meme coins. And when you buy a meme coin, you're kind of gambling on how much attention is this gonna get. Often they only last for like hours or a day or two before people start to get cold feet and the coin collapses. So he announces Trump Coin, by far the biggest celebrity to ever do a meme coin. I mean, he's about to be president. Their price promptly soars up to $72 a coin from under 10, from nothing.
- [41:07]
Ezra Klein
I cannot describe, I need to take a second here. I cannot describe how crazy it is that he did this. One of his superpowers is that some of the way that you protect against corruption. We were talking about what is and isn't legal before, is that there are things you don't do, not because it's illegal, but because the assumption is it would be so unfathomably politically lethal to engage in corruption of that scale and of that order that at least I think in the way the framers set up this government, the idea is you'd be impeached immediately and certainly in the modern era, the press would be all over you and it would be just a huge scandal and you would begin your administration caught up in one of the biggest financial corruption scandals and self dealing scandals in history. And this guy with his bizarre genius for shamelessness by just doing it all so unbelievably directly. The coin is called Trump. He's just promoting it himself. It's all for him. He's about to become president. He has control of the Republican Party, so they're not going to do anything to him. And they control Congress. He sort of overwhelms the system's capacity to know what to do about him. Because it never had any defense for something so over the line that just the administration refuses to treat as a problem. I mean, the thing that is supposed to happen in government is somebody says, hey, you're taking a bribe, you're trying to make yourself rich off of this. And guesses of course I'm not. I would never do how dare you impugn my integrity. And with Trump, it's like you're trying to make yourself rich off of this. And he's like, yeah, I mean, wouldn't you?
- [42:51]
Zeke Fox
And you're like, oh, to me, it's like, imagine if he, leading up to his inauguration, lined the National Mall with Trump's slots and these slots had, like, a terrible payout compared to regular slots. Like, it's ridiculous.
- [43:09]
Ezra Klein
But you could also put $100 million into one of the machines and let him know you did it. So how does he make money off of this? How does a family make money off of the Trump coin?
- [43:17]
Zeke Fox
Basically, at the beginning of the game, he has 1 billion coins. They cost him nothing to make, and he's selling them to people at various prices. It's kind of complicated, But I think 200 million coins were sold to the public, and they netted around $300 million. At this point, Trump still has 80% of the coins. The price is around $12. So Trump is sitting on about $10 billion worth of his Meme Coin. Now, if he starts to sell, the price would likely collapse. Also, the way that it's set up, he's not allowed to sell for a few months.
- [44:01]
Ezra Klein
So something weird just happened around this coin. There's a company called Freight Technologies, and they announced openly that they were buying up $20 million of Trump's meme Coin. And they said it was, quote, an effective way to advocate for fair, balanced, and free trade between Mexico and the U.S. now, most of the time, when people buy Meme Coins, they don't think it's an effective way to advocate for trade between Mexico and the U.S. so what is a company like that that is publicly announcing a multimillion dollar investment in the Trump Meme coin doing? What are they saying this Meme Coin investment is buying them?
- [44:47]
Zeke Fox
It seems like those guys are talking about using it to buy access. But actually, there's like a second weird thing that's happening that's almost a derivative of this Meme Coin boom, this new crypto boom, where companies on the stock market are realizing that if they start talking about crypto or start saying that they're buying crypto, investors who are excited by this will drive up their stock price.
- [45:17]
Ezra Klein
But crypto and Trump Coin are different.
- [45:21]
Zeke Fox
Yes.
- [45:21]
Ezra Klein
Buying Trump Coin is not the same as saying, I'm investing in Bitcoin or ether.
- [45:25]
Zeke Fox
Right. I mean, if I was going to meet the President, I'd want to pull out my crypto wallet and show him that I had some Trump Coin in it. Yeah, I mean, it seems like a obvious way to get in good with him. And in case he misses the message, he's having dinner with all these guys.
- [45:41]
Ezra Klein
Yeah. Tell me about the dinner on May 22. Who gets to be at this dinner? How do you get in?
- [45:46]
Zeke Fox
So, over the last few weeks, the Trump Meme Coin announced Kind of a contest. And whoever held the most would get to go to this special dinner at Trump's golf club outside D.C. and the top 25 got, like, a more private audience. It ended up being that it was going to cost you about $2 million to get in the top 25, and then the top 220 get in the door for this bigger event. And the cutoff ended up being about $50,000 of Trump meme Coin to get in the door. So, I mean, he's auctioning access to the president, and I guess you could.
- [46:33]
Ezra Klein
Say, is that really any different? Don't they do this with bundlers and other kinds of campaign finance donors all the time?
- [46:40]
Zeke Fox
I mean, I think he's been having other dinners with donors where it's cost a million dollars to get into the dinner, things like that. And. Right. Other presidents have done things like that, too. And the funny thing with the Meme Coin is that these recent purchases don't even necessarily directly benefit him because, like, the vast majority of his profits came from the initial sale.
- [47:03]
Ezra Klein
So does it matter to them if the price of the Meme Coin goes up and down? I mean, in theory, because if the price is higher, when they sell further tranches, they make more money.
- [47:14]
Zeke Fox
Yeah. So Trump holds 80% of the coins. If he starts selling, he could easily collapse the price. So if you go buy the Trump Meme Coin now and you push the price up a little bit, that is helping Trump when he goes to sell his coins. But he's not getting the money that you pay for the Meme Coin now. He's already sold his first tranche, and the rest of the he's sitting on.
- [47:41]
Ezra Klein
It doesn't seem obvious to me that in a world where he wants to sell at some point $100 million more of his own meme coin because he's got 800 million of them or whatever it is, yes, that would push the market down. But if he is this lever that nobody else has to push the market back up or to push it up right before he sells, or to make it clear to anybody that if they buy in at a big level, they might get to go to the next dinner, this actually does seem like it benefits him. I mean, he chooses the moment at which it benefits him. But you have the mass of assets in an asset class where the worth of that asset changes depending on how much people believe buying it will give them access and influence with you. And you put out a big sign saying, look how much access and influence buying a bunch of these will give you with me? That seems good for the future price of your asset, if and when you decide to sell more of it.
- [48:37]
Zeke Fox
If he wants to unload all $10 billion of Trump meme coin, though, it's going to take a lot of dinners.
- [48:41]
Ezra Klein
Sure, but you could do it 100 million bucks at a time, and that's not nothing.
- [48:45]
Zeke Fox
True.
- [48:45]
Ezra Klein
Look, I'd like to sell $100 million of a meme coin.
- [48:48]
Zeke Fox
You probably could.
- [48:49]
Ezra Klein
I'd be stoked.
- [48:58]
Donald Trump
Foreign.
- [49:08]
Helene Cooper
I'm Helene Cooper. I cover the US Military for the New York Times. So I'm sitting in my car in a parking lot outside the Pentagon. I had a cubicle with a desk inside the building for years, but the Trump administration has taken that over. People in power have always made it difficult for journalists. It hasn't stopped us in the past, it's not going to stop us now. I will keep working to get you the facts. This work doesn't happen without subscribers to the New York Times.
- [49:42]
Ezra Klein
So then in March 2025, the Trump family, through the World Liberty Financial Vehicle, announces a new stablecoin called USD1. What is that coin and how do they make money off of it?
- [49:56]
Zeke Fox
So a stablecoin is a form of cryptocurrency that's backed one to one with real US dollars. So a stablecoin is always going to be worth a dollar because in theory, you could take that stablecoin to its issuer and exchange it for a real dollar. There's another stablecoin called Tether, and it's so popular that there's now $150 billion of tether out there. And that company is extremely profitable. The reason this is profitable is because the stablecoins generally don't pay interest. So if I create 150 billion stablecoins, I then am sitting on 150 billion real dollars. I can go stick those in interest bearing investments and keep that money for myself. You can sort of think of a stablecoin as like a bank. So if the Trumps are creating their own stablecoin, USD1, it's like they've created the bank of Trump. It issues Trump bucks. And if you use USD1, if you buy USD1, it's like you're making a big deposit at the bank of Trump and you're not receiving any interest. The creators of the stablecoin are the ones that are going to make money on that.
- [51:25]
Ezra Klein
So they create this stablecoin. And then a few weeks ago in Dubai, it is announced by Steve Lakoff's son that a fund backed by Abu Dhabi was going to buy $2 billion worth of the Trump stablecoin, $2 billion, and use it to make an investment in the crypto platform Binance. And Zach Witkoff says, quote, we thank mgx, which is the name of the fund backed by Abu Dhabi and Binance, for their trust in us. This is only the beginning. How would you describe to me why a fund backed by Abu Dhabi would want to use the Trump Stablecoin as its currency for making this investment?
- [52:08]
Zeke Fox
I wouldn't actually look at them as the main player here. CZ Changpeng Zhao, the owner of Binance, which is the biggest crypto company in the world, was selling part of his company to this Abu Dhabi backed fund. Let me tell you a little bit about cz.
- [52:26]
Ezra Klein
Yes. Because cz, his situation is not straightforward.
- [52:31]
Zeke Fox
Yeah. So he's the most successful guy in crypto. His company is worth something like, who knows, $100 billion. But he was just released from a halfway house. In September, he pleaded guilty to failing to take required measures to prevent terrorists, child abusers, entities in sanctioned nations, criminal groups from using his exchange. Binance was fined $4 billion and CZ served a short sentence in prison.
- [53:08]
Ezra Klein
In prison in what country?
- [53:09]
Zeke Fox
Here in the US So this is.
- [53:11]
Ezra Klein
A guy, he's still running Binance.
- [53:14]
Zeke Fox
He still owns it. As part of the settlement, he stepped down.
- [53:17]
Ezra Klein
Okay, so he's a very central crypto figure. He has just been in jail, he's been in a lot of other, I mean, there's been a lot of other legal stuff swirling around in the sense that he's a pretty shady character. Seems pretty widespread to me.
- [53:31]
Zeke Fox
He's also being sued by the SEC for illegally running a crypto exchange in the U.S. one of the leaked messages that came out in this case was, bro, we are running an illegal crypto exchange in the us Something like that. It looks really bad. So if we go back to December, right after Trump's win, CZ was also at that bitcoin conference in Abu Dhabi hosted with David Bailey. And I've reported that he met with Steve Witkoff there, Trump's envoy who played an important role at World Liberty. And that after that meeting, World Liberty and Binance began talking about some sort of business deal. We don't know the details. CZ afterwards tweeted that it was fake news. CZ has also been pushing for a presidential pardon. So the fund was going to give CZ $2 billion, this Abu Dhabi backed fund. Now CZ can do anything with that $2 billion that he wants. And what this announcement is saying is that is going to put that $2 billion in USD 1 in the bank of Trump, and that's enough that World Liberty could quite easily earn $50 million a year in interest. And as we know, the terms of World Liberty dictate that whatever they do earn, the trumps will get 3/4. So as long as CZ keeps his money in USD 1, the trumps are earning interest on this and he's pushing for a pardon.
- [55:18]
Ezra Klein
It's like muzzle velocity for political corruption here. There are so many stories that on their own seem like they should be era defining political scandals. But the big picture that I see emerging when I track this story from Trump trading cards, where he looks like a firefighter or whatever, all the way to the Trump stablecoin. Trump media launching ETFs is that the Trump family has been groping its way, evolving, learning how to open up a lot of avenues to let people invest in various crypto schemes of theirs. For a long time, we've known crypto is used for drug deals. We've known it's used on the black markets. We've known it's used for things that you don't want to see regulated. And they seem to me to have figured out another very obvious use case, which is that you can do forms of payoffs that would be regulated if you tried to do them with the Trump campaign, but you can do them with crypto and you can have all kinds of foreign figures do it. Right. It's very, very, very wild west compared to other things in the US Financial system. And they're just making hundreds of millions of dollars, maybe over time, billions of dollars from this. It all looks astonishingly corrupt to me. Am I wrong? Am I missing? Can you give me an exculpatory version of this?
- [56:43]
Zeke Fox
I mean, I think what the Trumps have said about it is that we can't be bought. They can't deny that people are giving them money, but their claim is that they are still acting in what they believe to be the U.S. s best interest. But the conflicts of interest are so obvious. I mean, we talk about right now, Congress is debating stablecoin regulation. Is it going to be favorable to the President's coin? Would people in his party want to pass rules that would be bad for the President's coin? I mean, it seems unlikely or meme coins, since they really took off recently, the rules around them were not clear. And was Trump's SEC going to pass a rule saying, oh, actually this is an illegal offering. You can't do that. I mean, it would be pretty hard for them to do that with the President having just done a big meme coin offering. And in fact, once Trump's appointees took over at the sec, they announced that meme coins were collectibles like Beanie Babies and that the rules did not apply.
- [57:53]
Ezra Klein
I think one way you could look at this is you could say this is maybe a little bit more bald faced, but this is just the kind of political corruption we see all the time. You have Hunter Biden serving on Ukrainian energy boards and getting payouts. And this is an old thing where the family members of the President seem to get sweetheart deals and seem to sell things at inflated prices. But this feels different to me, both because of the sums involved.
- [58:20]
Zeke Fox
I think that the scale is so different that it's a different thing. Yeah, like Hunter Biden should not be taking advantage of his being the President's son to sell his terrible art to mystery buyers for hundreds of thousands of dollars. But how much juice with Joe Biden is that going to buy you? You know, this is like Trump himself making hundreds of millions of dollars. It's hard to believe that that would.
- [58:49]
Ezra Klein
Not influence so big. And then there's this other dynamic here, which is that the regulation on this industry is completely unformed. So this is not like other industries where we have structured regulations around the energy industry, around most of the financial industry. If you want to get into equities, we have a structured regulatory architecture for that here. It's all wild west. The crypto industry has been trying to win over the Trump administration. And now it's not just that the Trump administration is getting campaign donations from the crypto industry. It's that they have directly invested themselves, their family, their revenue streams. As Eric Trump said, one of the most successful things that the Trump family has ever done now depends on this extremely lax regulatory architecture continuing. And by the way, also depends on very lax political corruption laws around this in a way that don't exist for other forms of potential payouts.
- [59:46]
Zeke Fox
I'll give you an example that to me, I think is pretty significant in number. Go up. I was investigating the use of stablecoins and I found that this was pre Trump's coin, but that stablecoins were fueling this epidemic of scams where Americans were being catfished by spam messages, tricked into sending money for cryptocurrency investing schemes, and then sending huge amounts of money through stablecoins overseas where it would never be seen again. And on the other end of that, that in Southeast Asia, there's huge compounds where tens of thousands of people are forced to work as scammers under threat of torture or worse, and are spending all day, like, sending these spam messages and trying to trick people. Stablecoins enables this stuff where you get.
- [60:44]
Ezra Klein
The message and it's like, hey, didn't we have plans to go to dinner tonight?
- [60:48]
Zeke Fox
Right. And I went to Cambodia to investigate this. And there's stores all over the place where you, you can walk in anonymously, transfer your stablecoins and walk out with a brick of cash. And so, like, if the scammers were using Visa or MasterCard or bank wires, this would be much harder. It would never reach the scale that it has. Estimates are that, like, Americans are losing tens of billions of dollars to these types of crypto scams. You could imagine a stablecoin regulation that would require more of the same kind of know your customer anti money laundering rules that apply to PayPal, Visa, MasterCard. But is that going to happen when it would disadvantage the President's, you know, world liberty startup? So these are, like, real things that are being debated right now.
- [61:46]
Ezra Klein
How do all the crypto idealists feel about where this is going? The people who thought we'd have this leaderless, decentralized, borderless world where money worked completely differently, where the returns to being powerful and influential and connected began to dissolve. There is a real utopian strain in all this for a very long time. When they see it going in this direction. Are there people who are sad about it?
- [62:22]
Zeke Fox
Those people, by and large, are long gone. And the industry now, sure, there's some people who are criticizing Trump's crypto ventures, but mostly they're just really psyched that the industry is being deregulated. And number go up.
- [62:37]
Ezra Klein
Do you have a ballpark estimate at this point on how much the Trump family seems to have made off of crypto?
- [62:43]
Zeke Fox
At least $700 million.
- [62:45]
Ezra Klein
Oh, that's not small. It's a lot of money.
- [62:49]
Zeke Fox
Yeah. Trump's maybe worth 4 or 5 billion. What do people think now?
- [62:54]
Ezra Klein
People argue about this for a long time.
- [62:56]
Zeke Fox
Yeah. However rich he is, it's not nothing.
- [63:01]
Ezra Klein
I think that is a good place to end. So also our final question. What are three books you'd recommend to the audience?
- [63:06]
Zeke Fox
So one book I've been reading recently that I really love is called A distant the Calamitous 14th Century by Barbara Tookman. It's about France in the 14th century, but during the Hundred Years War after the Black Plague. But what really stands out to me is it really makes history weird. You realize these people's lives were not like our lives, like ordinary people's lives were very different. And they saw the world in a totally different way than we did. And they just seen humanity almost wiped out by a plague that they didn't understand. Another one I've liked recently was Nixon Land by Rick Perlstein. It's sort of like reading the newspaper every day, but during the Nixon years. And you have the benefit of hindsight and all sorts of Oval Office tapes. He's got a great eye for detail then. A novel I really liked recently is called Gretel and the Great War is by Adam Sachs. It's a collection of interconnected fables set in early 20th century Vienna. It's kind of like a literary puzzle. It's really inventive. It's very original, but also a portrait of Jewish Europe before the rise of Nazism. It was really funny. Full disclosure, I've admired his writing since we were children and I kind of owe him one for talking him into doing something really dumb in high school.
- [64:51]
Ezra Klein
Zeke Fox, thank you very much.
- [64:53]
Zeke Fox
Thanks, Ezra.
- [65:13]
Ezra Klein
This episode of the Ezra Clan show is produced by Andy Galvin, Fact checking by Michelle Harris. Our senior engineer is Jeff Geld, with additional mixing by Aman Sahota. Our executive producer is Claire Gordon. The show's production team also includes Marie Casillon, Roland Hu, Elias Isquith, Marina King, Jan Cobel, Kristin lin and Jack McCordick. Original music by Pat McCusker. Audience tragedy by Christina Samulewski and Shannon Busta. The director of New York Times Opinion Audio is Anura Strasser. And special thanks to Talbot County Free Library.