A series of cryptocurrency companies that have broken industry boundaries have gone public, attracting investors while also pushing market risks to high levels. Over 250 listed companies are accumulating cryptocurrencies, with leverage borrowing expanding. Deregulation and the business expansion of the Trump family are intertwined, transmitting crypto market risks throughout the entire financial system. This article is based on a piece by The New York Times, compiled, translated, and written by Foresight News.
(Background summary: Trump enters clean energy! TMTG announces merger with TAE Technologies to create a “nuclear power plant”; DJT jumps 22%)
(Additional background: The most money-raising US president in history, how the Trump family turns political influence into their own treasury)

Table of Contents

• Capital Frenzy: An Out-of-Control Crypto Gamble
• Flash Crash Horror: Trillions of Market Value Disappeared Overnight
• Crazy Experiments: Regulatory Dilemmas of the Tokenization Wave

A series of cryptocurrency companies that have broken industry boundaries have gone public, attracting investors while also pushing market risks to high levels.

This summer, a group of executives pitched a business plan to Wall Street financiers and Anthony Scaramucci, a former Trump advisor. They hoped Scaramucci would join a strategically unique listed company: by stockpiling massive amounts of cryptocurrencies, to enhance the company’s appeal to investors.

“They actually didn’t need to say much,” Scaramucci recalled. Soon after, he joined three unknown companies employing this strategy as an advisor, “the entire negotiation process was very smooth.”

However, this wave did not last long. In the fall, the cryptocurrency market plummeted, and the stock prices of the three companies Scaramucci was involved with tumbled sharply, with the worst falling over 80%.

The rise and fall of these companies are a microcosm of the crypto boom initiated by Trump. The leader who calls himself “the first crypto president” not only ended regulatory crackdowns on crypto companies but also publicly promoted crypto investments at the White House, signed bills supporting crypto development, and even issued a meme coin called TRUMP, catapulting this once niche field into the global economic spotlight.

Today, the chain reaction of Trump’s support for cryptocurrencies is gradually becoming evident.

Since this year, numerous new crypto companies that break industry boundaries have emerged, drawing more people into this highly volatile market. Over 250 listed companies are now stockpiling cryptocurrencies—these digital assets’ price fluctuations are similar to stocks, bonds, and other traditional investments.

In 2024, former Trump advisor Anthony Scaramucci will attend the Abu Dhabi Bitcoin Conference.

A wave of companies has launched innovative products to lower the barriers for including cryptocurrencies in brokerage accounts and retirement plans. Meanwhile, industry executives are lobbying regulators to issue crypto tokens pegged to listed company stocks, aiming to create a stock trading market based on blockchain technology.

This aggressive wave of innovation has already exposed many issues. In the past two months, mainstream cryptocurrencies’ prices have sharply declined, causing companies heavily invested in crypto assets to face collapse risks. Other emerging projects have also raised alarms among economists and regulators, as market risks continue to accumulate.

The core concern fueling worries is the continued expansion of leverage. By this fall, listed companies have heavily borrowed to buy cryptocurrencies; investors’ holdings of crypto futures contracts have exceeded $200 billion. Most of these trades rely on leverage, which can generate huge profits but also hidden liquidation risks.

Even more concerning is that a series of new initiatives in the crypto industry have deeply linked the crypto market with the stock market and other financial sectors. If a crisis erupts in the crypto market, risks could propagate throughout the entire financial system, triggering a chain reaction.

“Today, the line between speculation, gambling, and investment has become blurred,” said Timothy Massad, who served as Assistant Secretary for Financial Stability at the US Treasury after the 2008 financial crisis. “This situation makes me deeply worried.”

White House Press Secretary Karoline Leavitt responded that Trump’s policies are “driving innovation, creating economic opportunities for Americans, and helping the US become a global crypto hub.”

Crypto industry executives argue that these emerging projects demonstrate the potential of blockchain technology to reshape outdated financial systems. They see market volatility as an opportunity for profit.

“High risk often comes with high reward,” said Duncan Moir, President of 21Shares, which issues crypto investment products. “Our mission is to bring these investment opportunities to more people.”

The rise of this wave of innovation depends heavily on a comprehensive deregulation environment, which is the most favorable window for crypto companies. For years, the US Securities and Exchange Commission (SEC) has been in legal battles with the crypto industry; but in January this year, the SEC established a dedicated crypto task force and has held talks with dozens of companies seeking new regulations or product approvals.

An SEC spokesperson stated that the agency is committed to “ensuring investors have sufficient information to make rational investment decisions.”

U.S. Securities and Exchange Commission headquarters building in Washington

It is worth noting that many of these emerging companies are connected to the expanding crypto business empire of the Trump family, blurring the lines between business and government.

This summer, executives from Trump’s crypto startup World Liberty Financial announced they would join the board of the listed company ALT5 Sigma. Originally focused on recycling, the company now plans to raise $1.5 billion to enter the crypto market.

( Capital Frenzy: An Out-of-Control Crypto Gamble

Crypto enthusiasts have dubbed Trump’s government-driven high-risk investment wave as “Summer of Crypto Treasure Companies.”

“Crypto Treasure Companies” ()DAT###) refer to listed companies whose core goal is to stockpile cryptocurrencies. Data from crypto consulting firm Architect Partners shows that nearly half of these emerging companies focus on Bitcoin, the most well-known crypto, while dozens have announced plans to buy meme coins like Dogecoin.

Monthly number of crypto treasure companies founded in 2025. Data source: Architect Partners, as of December 16

These companies often operate with a simple, brute-force approach: a group of executives identify a small publicly traded company, such as a toy manufacturer, and persuade it to transform into a crypto stockpiling business; then they raise hundreds of millions of dollars from high-net-worth investors, ultimately using the funds to buy cryptocurrencies.

The core purpose is to issue traditional stocks pegged to crypto prices, allowing more people to participate in crypto investments. Theoretically, this strategy offers significant profit potential. Many investment funds and asset managers have been cautious about direct crypto investments due to storage complexities, high costs, and hacking risks.

Investing in crypto treasure companies is akin to outsourcing crypto storage and logistics. But these companies also hide huge risks: many are hastily established, with management lacking experience in running a public company. Data from Architect Partners shows these companies have announced plans to borrow over $20 billion to buy cryptocurrencies.

“Leverage is the root cause of financial crises,” warned Corey Frayer, a former crypto advisor at the SEC. “And the current market is fostering massive leverage.”

Some crypto treasure companies have already fallen into operational or management crises, causing investors to suffer huge losses.

After transforming into a crypto treasure company, the listed firm Forward Industries heavily invested in SOL. In September, it raised over $1.6 billion from private investors, and its stock price once soared to nearly $40 per share.

Allan Teh from Miami manages assets for a family office. He invested $2.5 million in Forward Industries this year. “Everyone thought this strategy was foolproof, and crypto prices would keep rising,” Teh recalled.

However, as the crypto market crashed, Forward Industries’ stock fell to $7 per share this month. The company announced plans to buy back $1 billion worth of shares over the next two years, but this did not stop the decline.

“Music stops, game over. Now I’m panicking. Can I get out whole?” Teh has lost about $1.5 million. “How much will this investment ultimately lose?” Forward Industries declined to comment.

The proliferation of crypto treasure companies has raised alarms at the SEC. “Obviously, we are very concerned,” said SEC Chairman Paul Atkins in an interview at the Miami crypto conference last month. “We are closely monitoring the situation.”

Behind this new crypto track, there is strong support from the Trump family.

World Liberty Financial founders include Trump’s son Eric Trump and Zach Witkoff.

In August, World Liberty Financial announced that its founder, (including President Trump’s son Eric Trump), would join the board of ALT5 Sigma. The listed company plans to stockpile WLFI, a crypto token issued by World Liberty Financial, with Eric Trump currently serving as a strategic advisor and board observer.

This partnership appears to allow the Trump family to profit quickly. According to profit-sharing agreements published on World Liberty Financial’s website, whenever WLFI tokens are traded, Trump’s business entities can take a cut.

Subsequently, ALT5 Sigma’s operations sharply declined. In August, the company disclosed that a subsidiary’s executive was convicted of money laundering in Rwanda, and the board was investigating other “undisclosed matters.” Soon after, ALT5 Sigma announced a temporary suspension of its CEO and terminated two other executives.

Since August, the stock price has plummeted 85%. An ALT5 Sigma spokesperson said the company remains “confident in future development.”

( Flash Crash Horror: Trillions of Market Value Disappeared Overnight

The recent turbulence in the crypto market can be traced back to a single night in October.

Under Trump’s policies, the crypto market had been rising for most of this year. But on October 10, the prices of Bitcoin, Ethereum, and dozens of other cryptocurrencies suddenly crashed, resulting in a flash crash.

The immediate trigger was Trump’s announcement of new tariffs on China, which caused severe global economic shocks. The root cause of the crypto market’s heavy losses was the massive leverage fueling the rise.

On crypto trading platforms, traders can use their crypto holdings as collateral to borrow fiat currency or increase their crypto positions with leverage. Data from Galaxy Research shows that in Q3, global crypto lending grew by $20 billion in a single quarter, reaching a record high of $74 billion.

Previously, the riskiest leveraged crypto trading mostly occurred overseas. But in July, Coinbase, the largest US crypto exchange, announced a new investment tool allowing traders to bet 10x on Bitcoin and Ethereum futures prices. Before that, US federal regulators had revoked guidelines restricting such leverage trading, clearing the way for Coinbase’s new product.

In July, Coinbase launched a 10x leveraged crypto trading tool.

The October flash crash, while not causing the industry-wide collapse like in 2022, sounded an alarm, signaling systemic risks lurking in the crypto sector.

Leverage trading amplifies losses when markets decline. Trading platforms often forcibly liquidate positions, selling off collateral assets, which can further drive down prices.

Data from CoinGlass shows that on October 10, at least $19 billion worth of crypto leveraged trades were forcibly liquidated worldwide, affecting 1.6 million traders. The liquidation wave mainly hit Binance, OKEx, and Bybit.

The crash triggered a surge in trading volume, causing technical failures at several major exchanges, preventing traders from transferring funds in time. Coinbase said it was aware that some users experienced delays or system performance issues during the event.

Tennessee-based software developer and crypto investor Derek Bartron said his Coinbase account was frozen during the crash. “I wanted to close my positions, but I couldn’t,” he said. “Coinbase essentially locked up users’ funds. We could only watch as our assets’ value plummeted, helpless.”

Derek Bartron said that in the days after the crash, he lost about $50,000 in crypto assets, partly because he couldn’t close positions in time.

A Coinbase spokesperson said the company provides automated risk management tools, “which operated normally during this market volatility, and our trading platform remained stable throughout the event.”

Binance acknowledged that the exchange experienced “technical issues due to increased trading volume” and said it has taken measures to compensate affected users.

) Crazy Experiments: Regulatory Dilemmas of the Tokenization Wave

One night this summer, crypto entrepreneurs Chris Yin and Teddy Pornprinya dressed formally and appeared at the Kennedy Center in Washington for a grand black-tie dinner.

The event was star-studded. Chris Yin, who had just bought a new tuxedo the night before, met US Vice President JD Vance, who had previously invested in Silicon Valley venture capital; he also exchanged ideas with former hedge fund manager and current US Treasury Secretary Scott Bessent; they even took photos with Trump, who gave a thumbs-up to the camera.

Yin and Pornprinya’s trip was to pave the way for their startup Plume. The company is pushing an industry-disrupting project to extend blockchain technology into broader financial sectors.

For months, Plume has sought regulatory approval in the US to create an online trading platform issuing crypto tokens pegged to real-world assets, including listed stocks, farms, oil wells, and other tangible assets.

Plume founders Chris Yin and Teddy Pornprinya at the Empire State Building

Currently, Plume has launched similar tokenization products overseas, allowing clients to buy and sell these asset tokens like cryptocurrencies. But this “asset tokenization” business is in a legal gray area in the US. Decades-old securities laws impose strict regulations on issuing equity in various assets, requiring detailed disclosures to protect investors.

This year, asset tokenization has become one of the hottest concepts in the crypto industry. Industry executives claim that tokenized stocks can make trading more efficient and create a 24/7 global trading market. US-based crypto exchanges like Kraken have launched crypto-based stock trading services overseas.

Crypto industry leaders say that crypto trading, based on public ledgers, is more transparent than traditional finance. “All transactions are traceable and auditable,” said Kraken CEO Arjun Sethi. “It’s almost risk-free.”

Kraken and Coinbase representatives have met with the SEC to discuss regulation of tokenized assets; meanwhile, Plume is seeking legal pathways to expand its business within the US.

But this race of tokenized products has raised concerns among current and former regulators and traditional finance executives.

In September, Federal Reserve economists warned that asset tokenization could transmit crypto market risks to the entire financial system, “weakening policymakers’ ability to maintain payment system stability under market stress.”

SEC Chairman Paul Atkins expressed a positive attitude toward tokenized stocks, calling it a “major technological breakthrough.” “Under securities law, the SEC has broad discretion to support regulation of the crypto industry. I am committed to making this happen,” Atkins said at a May industry roundtable on asset tokenization.

To promote regulatory compliance, Yin and Pornprinya have taken a series of steps. In May, they met with the SEC’s crypto task force; they also provided charts for a White House crypto industry report; and established Plume’s US headquarters on the 77th floor of the Empire State Building.

At the Washington black-tie dinner this summer, Trump’s team showed strong interest in the two founders. “They know about Plume,” Pornprinya recalled. “Everyone was aware of our business.”

Weeks later, Plume announced a key partnership with Trump’s family-owned World Liberty Financial.