JUANA SUMMERS, HOST:
In a stunning financial disclosure this week, President Trump revealed he made more than a billion dollars last year from cryptocurrency businesses. But in terms of the investors who bought into those cryptocurrencies, they ended up losing a substantial amount of money. And to help us unpack all of this, I'm joined by NPR senior business editor Rafael Nam. Hi there.
RAFAEL NAM, BYLINE: Hey, Juana.
SUMMERS: Hey. So help us understand how Trump made so much money last year from cryptocurrencies.
NAM: Essentially, Trump has gone back to the blueprint that has earned him so much money as a businessman - effectively, find ways to earn a lot of money but make sure to protect himself and his family from any downsides. And he does this mainly through two ways - licensing his name, because he knows his name has a lot of value, especially to his supporters, and making his money up front.
SUMMERS: OK, so in the past, he might have, say, put his name on wine or steaks or real estate. How does this strategy work with his crypto businesses?
NAM: Sure. Let's go through each of the two main ways. In the first case, he licensed his name to a cryptocurrency or, more specifically, a meme coin that's called Trump, obviously. Meme coins, for those who haven't heard the term, are essentially cryptocurrencies that are based on silly things like memes or even cartoons. That licensing deal made him over $600 million. That's a substantial amount of money. But unfortunately for investors who bought into this meme coin, they ended up doing really badly because it crashed in value. It went from over $70 to just over $1, and that's obviously a huge fall. But Trump benefited anyway. He has his royalty deal, so he can make money from each transaction. And I talked to Gary Kalman, an executive director at Transparency International, who explained it this way.
GARY KALMAN: He's not invested personally in his own meme coin. And so if that goes from $75 to $1.99 or whatever it is right now, he doesn't actually lose money, even though the investors or the consumers of that product have lost a significant amount of money.
NAM: Now, Juana, to give you a sense of how widespread the losses are, one data firm called Chain Analysis (ph) estimates that there are more than 750,000 investment accounts that are holding these meme coins that are effectively almost now worthless. That's three-quarters of a million accounts.
SUMMERS: Oh, wow. OK, that's a big number. So, Rafael, that was one way Trump made money from the crypto sector, but it's not the only way, right?
NAM: Right. He also makes his money up front - right? - as I said. He and his family helped launch a crypto company called World Liberty Financial, which also sold a cryptocurrency coin. And just like with this meme coin, this cryptocurrency also crashed down by around 85% since its launch. Quite a spectacular fall for those investors who bought into that. But, again, Trump didn't make any losses. In fact, he made at least $500 million from World Liberty Financial because he made his money up front during the initial sale of coins back when it was priced quite high and also by selling a stake in the company to a firm linked to the United Arab Emirates government. So, again, another case of protecting himself and his family from losses.
SUMMERS: So Trump made a lot of money, clearly, while investors lost a lot. How are they feeling?
NAM: Well, I've been spending a day or two just checking up on social media forums, and I reached out to many of them, but none of them responded. But the comments I read across social media forums was that there was a sense of resignation and just a little anger overall. But just - you have to keep in mind that a lot of these investors who bought into the cryptocurrencies backed by the Trump family are generally big Trump supporters, and many are still standing by him even though, financially, they may be hurting.
SUMMERS: NPR's Rafael Nam, thank you.
NAM: Thank you, Juana. Transcript provided by NPR, Copyright NPR.
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