A detailed investigation by the New York Times shows that a wave of crypto-linked companies encouraged by United States President Donald Trump is facing steep losses after a sudden market downturn this autumn. The administration’s regulatory reset transformed crypto from a niche sector into a major political and financial project, but the consequences are becoming clearer.
Central to the boom are “digital asset treasury companies”, or DATs. These publicly listed firms raise large sums to buy cryptocurrencies in bulk, giving investors indirect exposure to digital coins. Influential figures like Anthony Scaramucci joined several of these ventures this year. All three of his affiliated companies have since suffered major losses, with one stock falling more than 80 percent.
Under Trump, regulators adopted a friendlier stance, and the Securities and Exchange Commission created a crypto task force that has been meeting with companies seeking approvals for new products. But former officials warn that leverage in the system has reached dangerous levels. According to data cited by the NYT, public companies have announced plans to borrow more than 20 billion dollars to buy crypto, magnifying losses during downturns.
That vulnerability became evident during the 10 October “flash crash”, when Bitcoin and Ether plunged after a White House tariff announcement. CoinGlass reports that at least 19 billion dollars in leveraged bets was liquidated globally in a single day. Major exchanges including Coinbase and Binance experienced technical issues as users tried to sell.
The Trump family has played a visible role in the expansion. Eric Trump co-founded World Liberty Financial, which launched its own token and partnered with ALT5 Sigma, a public company aiming to raise 1.5 billion dollars for crypto purchases. ALT5 Sigma has since faced internal crisis and lost 85 percent of its share value.
Another frontier, highlighted by the NYT, is “tokenisation”, where companies such as Plume seek permission to issue digital coins representing shares in real-world assets. Regulators including the Federal Reserve warn this could transmit crypto volatility into traditional finance.
For now, the turmoil remains contained, but analysts at Reuters, the FT and the IMF caution that the mix of high leverage, rapid financial innovation and political endorsement has created a fragile ecosystem that could spill beyond the crypto market if volatility persists.