Democratic senators Elizabeth Warren and Richard Blumenthal have launched their latest inquiry into the finances related to President Donald Trump, his family, and the people closest to the administration. This time, the senators are asking the Securities and Exchange Commission (SEC), led by Trump appointee Paul Atkins, to launch an investigation into whether the $TRUMP memecoin was an “illegal scam,” according to a letter CNN saw.Warren and Blumenthal launch their latest attack on TrumpWarren and Blumenthal have stirred up storms in the last two years over income streams flowing from the digital asset industry to the president, his family, and high-ranking officials. In that time, they have sent letters, demanded hearings, and requested documents about business deals that have raised their suspicions. As Cryptopolitan reported in April, Senator Adam Schiff joined the duo to push to publicize details of the Trump memecoin gala at Mar-a-Lago, where the opportunity to dine with POTUS was the main attraction.By June, three other senators joined Warren and Blumenthal in demanding due diligence on a $500 million deal between the Trump family’s DeFi project, World Liberty Financial venture, and a state-linked partner from the UAE. Who is calling the TRUMP meme a ‘rug pull?’The central accusation in the letter that Senator Elizabeth Warren and Warren Blumenthal sent to SEC Chair Paul Atkins is whether President Trump could be involved in a rug pull. In crypto circles, a rug pull refers to a pre-planned liquidity extraction that leaves buyers holding worthless tokens after a coordinated hype campaign. Argentina’s Javier Milei has been fighting his own rug pull accusation since 2025, when the LIBRA token crashed shortly after the president’s endorsement post on X. CNN wrote that the letter they saw relayed concern that “President Trump’s memecoin scheme may constitute an illegal scam” and asked the agency “to detect any illegal fraud or unjust enrichment that the coin may have facilitated.” The $TRUMP coin launched days before the 2025 inauguration and briefly touched a market value of about $9 billion on January 19, 2025. CoinMarketCap data puts the coin under $400 million as of this report. Nansen data estimates that close to a million people have lost about $3.8 billion to the president’s venture as of the end of June.And similar to the insiders of rug pull schemes, the president has done well regardless of the losses from his crypto ventures. Warren was among those who asked to investigate the president after his family reported about $1.4 billion in income from its digital currency businesses in just one year. Is the TRUMP memecoin a rug pull?The blockchain intelligence firm TRM Labs knocked down the rug pull theory in 2025 and doubled down this year that the project “does not have the hallmarks of a rug pull.” Ari Redbord, who is now TRM’s global head of policy after previous federal prosecutor and Treasury roles, conceded the distastefulness of the outcome. “A small group of early buyers and the coin’s creator profited. Most of the people who bought in later lost money, and lost it at scale,” Redbord said. He continued that the question of whether the project was a rug pull or not will never resolve favorably for the president, in the context that roughly a million retail buyers absorbed losses while the few holders who controlled 80% of the supply walked away with most of the gains. Warren and Blumenthal have tried to bridge that gap by describing the episode as a possible “soft rug pull,” where price support is withdrawn gradually rather than in one sudden dump. “The SEC must be willing to enforce the law even when potential wrongdoers include those with powerful political connections,” the senators wrote.Whether the SEC has any room to actThe request runs into a jurisdictional wall that the Trump administration built. Days before Trump took office in 2025, the SEC charged a New York blockchain engineer over a “rug pull fraud.” Weeks later, in late February 2025, the agency issued guidance stating that a memecoin is not a security, which narrows the SEC’s authority to police these tokens at all.The White House referred questions to the Trump Organization, and the SEC declined to comment, according to CNN. The letter adds to pressure that has already stalled crypto legislation, with several Democrats refusing to back a federal regulatory bill unless it addresses conflicts tied to the president’s holdings.The smartest crypto minds already read our newsletter. Want in? Join them.