FT: "Total Profit of $100 Million... Regulatory Blind Spot"
A report has emerged stating that, just before the public launch of the "meme coin" named after Melania Trump, wife of former U.S. President Donald Trump, a small number of investors purchased the coin in advance and made substantial profits.
According to the Financial Times (FT) on May 6 (local time), Melania Trump announced the launch of the Melania Coin ($MELANIA) on the social media platform Truth Social on the night of January 19 this year, the day before Donald Trump's inauguration ceremony.
The FT pointed out that the issue is that some investors began purchasing large amounts of the coin starting about two minutes before Melania Trump posted the announcement on Truth Social.
Based on its own analysis, the outlet reported that "around 20 digital wallets purchased approximately $2.6 million (about 3.6 billion KRW) worth of the (Melania) coin from the cryptocurrency market where it was deposited."
Immediately after Melania Trump announced the launch of the meme coin, the coin's price surged, and the wallet owners quickly moved to realize their profits.
The FT estimated that "these wallets rapidly offloaded most of their (Melania) coins, with 81% of such transactions taking place within 12 hours," and that this scheme netted them as much as $99.6 million (about 138 billion KRW) in windfall gains.
For example, one digital wallet that bought $681,000 (about 940 million KRW) worth of Melania Coin just 64 seconds before the official announcement resold the coins over the next 24 hours, earning $39 million (about 5.4 billion KRW).
Another account, which was the very first to purchase Melania Coin, invested $40,000 (about 55 million KRW) 141 seconds before the official announcement and made a profit of $2.5 million (about 3.47 billion KRW) in just two hours. The FT reported that this account appears to be linked to a venture company associated with cryptocurrency entrepreneur Hayden Davis, who was involved in the launch of Melania Coin.
Nevertheless, the FT added that because meme coins are not considered securities under U.S. law, there is no requirement to comply with disclosure or insider trading regulations designed to protect individual investors.
The Melania Coin is sold through "MKT World," a Delaware-based company that Melania Trump has used for various business ventures since 2021. However, it is not clearly known whether MKT World is the actual issuer of Melania Coin.
According to the FT, Melania Trump's representatives did not immediately respond to inquiries regarding these reports.
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