A stunning revelation hit the meme coin space on Wednesday when the infamous former pharmaceutical executive Martin Shkreli was linked as one of the masterminds behind the latest Trump-themed cryptocurrency called TrumpCoin (DJT), which claims to be the official coin of the former President.

Shkreli was forced to admit that he was the founder of the project after ZachXBT, a well-known crypto detective who usually posts information about crypto hacks and scams on the social media platform X (formerly Twitter), took part on a bounty hunt hosted by the crypto analytics firm Arkham that offered $150,000 to the person who unmasked the founder of DJT.

“Find definitive evidence of the creator of $DJT. We will accept private proof for this bounty, but if accepted, that proof will be made public. The source must be original and not from elsewhere on the internet,” Arkham posted on X.

Shortly after ZachXBT confirmed that he had sent evidence to Arkham to collect the bounty, he was ‘panic-messaged’ by Shkreli with a confession that pointed to him and Barron Trump, the youngest son of Donald J. Trump, as the co-creators of the meme coin.

Shkreli Claims to Have Launched DJT Alongside Barron Trump

ZachXBT claims that Shkreli reached out just minutes after he submitted his application to the Arkham’s bounty saying that he had “1,000 pieces of evidence” that he created the token alongside Trump’s son.

Shkreli also sent ZachXBT a screenshot of a conversation with the former kickboxing star and active crypto pumper Andrew Tate where he mentions a conversation with Barron where he was asked to participate in the DJT token launch by buying a significant portion of the total supply to boost the price temporarily.

All of these recent developments and finger-pointing are questioning the legitimacy of the intentions of the people who created the DJT token. They also raise questions about how Shkreli’s involvement with the project could result in a new wave of legal issues for him.

Yesterday, Arkham confirmed that ZachXBT has solved the bounty and earned the $150,000 reward. The team stated that he “submitted definitive evidence” that Shkreli was the founder of the DJT token.

Shkreli Initially Denied his Involvement with DJT

The Solana-based DJT meme coin captured the crypto world’s attention earlier this month after its price skyrocketed by 300% amid some unverified rumors that suggested that its founders had direct ties to the Trump family. Some even wondered whether Trump himself would come out and endorse the coin.

At the peak of the speculative frenzy, over $1.9 million worth of bets were placed on Polymarket to take sides on whether there was an actual link between DJT and Trump or a member of his family.

Shkreli touted TrumpCoin multiple times as the “official” cryptocurrency of the former president and even proposed a $100 million wager with a trader named GCR to reinforce his claim.

However, Shkreli initially denied his involvement in the creation of the token, possibly as that could result in a direct violation of his parole. However, ZachXBT’s evidence quickly rattled Shkreli and prompted him to take offense.

He hosted a Twitter Space shortly after the investigator sent his application to Arkham and revealed his involvement with DJT alongside another ten individuals. He clarified that over 40 people were aware of the project as well.

On-Chain Evidence from ZachXBT Point to Insider Trading

Among the evidence cited by ZachXBT that pointed to Shkreli’s involvement, he provided on-chain records that directly link the former hedge fund manager with DJT’s supply. He provided details of transactions of one specific wallet that converted $832,000 worth of DJT to the USDC stablecoin – a transaction that suggests insider trading.

This wallet showed links to another project called Shoggoth that Shkreli also supported publicly.

Further adding to the claims of insider trading involving DJT, crypto analysts from LookOnChain identified another trader who may have made around $1 million in profits after purchasing 58.87 million DJT at around $9,400 and then liquidating those holdings days later at over 110x initial cost basis.

This kind of trick is not unfamiliar to Shkreli and is fairly common in the crypto and meme coin space as insiders tend to take advantage of these projects. These pump-and-dump schemes involve manipulating the price temporarily to attract unwary buyers by taking advantage of the token’s low initial liquidity and notoriety.

They are typically endorsed by prominent social media influencers and public figures who lure speculators with the promise that these tokens can be a quick path to riches. Once the price jumps significantly, the insiders dump their holdings on those who are frantically buying them and leave them holding worthless bags of crypto assets and mounting losses.

Shkreli’s conviction in 2017 for committing securities fraud and jacking up the price of a life-saving drug called Daraprim is a testament to how far he can take these schemes to turn a profit.

He was released from prison in 2022 but still has to adhere to the conditions set forth by the court on his parole, which include refraining from any form of self-employment that involves accessing third-party assets, investments, or money, and providing detailed financial disclosures to his parole officers.

Could Shkreli be Legally Liable for Pumping DJT?

In admitting his role as co-creator of DJT alongside Trump’s youngest son Barron, Shkreli may have opened a new legal can of worms involving violations of his parole conditions and securities laws (again) as he failed to timely disclose his participation in the highly-publicized cryptocurrency launch.

He may face scrutiny over how the token’s supply was initially distributed and monetized, especially if the identities of major DJT holders overlap with employees or allies linked to his previous fraud convictions.

Additionally, Shkreli’s choice to associate an unregulated token sale lined with the image of a former president – most likely without his permission – could trigger investigations by regulators who are already on high alert about crypto projects making unsubstantiated claims about being endorsed by the public figures they depict.

Prior to this DJT scandal, Shkreli was once again swept into the courthouse in a new legal proceeding involving the crypto collective PleasrDAO over his controversial $2 million purchase of the sole copy of Wu-Tang Clan’s “Once Upon a Time in Shaolin” secret musical album.

PleasrDAO was forced to distribute the album’s ownership via the rushed sale of non-fungible tokens (NFTs) after Shkreli publicly disclosed that he had shared the songs contained in the album with his friends and even played them live on YouTube to his followers.

While Shkreli’s motivations for launching DJT remain unclear, this latest stunt could put him at risk of going to prison once again if his officers find that he has violated the terms of his parole.

Some view it as Shkreli’s inability to resist the urge to be a topic of conversation in mainstream and niche media – tactics he previously embraced during his rise and fall as a former pharmaceutical executive and investor.

For their part, Donald Trump’s team has kept their silence regarding the DJT token and Shkreli’s professed involvement since it first went viral earlier this month. Trump has recently been involved in some Web3 projects like issuing non-fungible tokens (NFTs) to raise funds for his campaign but no links to meme coins have been revealed by the former president yet.

Could he be using Barron as a proxy for his adventures in this controversial space? No evidence points to that yet but Shkreli’s disclosures are surely raising eyebrows among regulators about why the real estate mogul’s youngest son is actively involved in pumping a meme coin with his father’s name on it.