Trump Memecoin Gala Leaves Crypto Battling Fresh Credibility Crisis

Three sitting US senators have opened a formal investigation into a dinner event tied to US President Donald Trump’s memecoin, with questions mounting over whether the arrangement amounts to a “pay-to-play” scheme that funneled money from ordinary investors to a tight circle of insiders.

Senators Move To Examine The Event

The dinner became a flashpoint after analyst Simon Dedic posted on X that the Trump-linked token had been used to drain money from retail buyers at a scale that dwarfs many past crypto failures.

Based on his figures, roughly $4.3 billion left the pockets of everyday investors. About $1.2 billion of that ended up in wallets controlled by insiders, while $320 million reportedly went to entities connected to the Trump family.

I am wondering whether the Trump memecoin dinner tonight is one of the most damaging thing that has happened to crypto’s reputation in years.

Even worse than FTX or Luna. Those at least pretended to be something legitimate before they collapsed.

But this is the President of the… pic.twitter.com/l9nzwaN1jv

— Simon Dedic (@sjdedic) April 25, 2026

The token itself has lost around 95% of its value from its peak. An estimated 2 million holders are now sitting on losses — most of them late buyers who entered based on hype and name recognition rather than any underlying project.

A Different Kind Of Collapse

What sets this situation apart from earlier crypto disasters is how it unfolded. The FTX collapse and the Terra Luna crash were painful. But both projects, at least on the surface, claimed to offer something real before they fell apart.