WASHINGTON, D.C.: A cryptocurrency company that had been investigated for more than a year by the Joe Biden administration is now working with a new partner — Trump's social media company.

For more than a year during the previous administration, financial regulators had told Crypto.com that enforcement action was likely, as part of an aggressive push to regulate the largely unregulated cryptocurrency industry.

Come November 2024, following Donald Trump's election victory, the company's legal problems disappeared.

Crypto.com donated US$11 million to political committees tied to the Republican president, records show. Within months, the investigation was dropped. By August, Crypto.com announced it was investing roughly $1 billion in assets in a venture with the Trump Media and Technology Group.

Legal and ethics experts say Crypto.com's journey is a case study on the conflicts of interest that have arisen in Trump's second presidency. Unlike his predecessors, Trump has allowed his family businesses to enter lucrative arrangements with companies regulated by the federal government, some of which have benefited from action taken by his administration.

In this instance, the deal struck with Crypto.com favored the president's social media company, which has lost hundreds of millions of dollars since its 2021 launch. Trump Media and Technology Group put up little cash yet received a substantial ownership stake in the new treasury for Crypto.com's Cronos token.

Presidents have historically gone to great lengths to "avoid even the appearance that they are using the office for personal profit," said Kedric Payne, who was formerly a top attorney for the Office of Congressional Ethics.

Calling the government a "pay-to-play administration," Payne, who leads the ethics program at the nonpartisan Campaign Legal Center in Washington, said there was a clear perception that, in order to obtain favorable policies and actions from the administration, a company needed to provide a financial benefit to the president.

However, Crypto.com spokeswoman Victoria Davis disagreed with legal and ethics experts.

"Crypto.com looks to partner with companies that are pro crypto and share our vision for its future," said Davis, who called Trump Media "a pioneer in digital media."

Trump Media, while refusing to respond to specific questions about the arrangement, stated briefly that the story seemed to have been spoon-fed to The Associated Press by political operatives.

The White House also said that Trump had avoided any conflicts of interest by placing his business holdings in a trust controlled by his sons after the election.

"Neither the President nor his family has ever engaged, or will ever engage, in conflicts of interest," White House press secretary Karoline Leavitt said in a statement.

Under the terms of the deal, which has yet to be finalized, Crypto.com would contribute the lion's share of the capital, committing about $1 billion worth of its Cronos token to the venture.

Yorkville Advisors, a financial services firm with close ties to Trump Media, would provide a line of credit. Trump Media's contribution would be more limited and would include "a license to use certain intellectual property," according to an SEC filing.

A company press release said all three firms would hold "majority ownership" in the new venture, though the size of Trump Media's stake has not been disclosed.

Corey Frayer, a cryptocurrency policy expert and a senior official at the SEC during Biden's presidency, said that it looks more like a plea deal than a business deal.