Rep. Maxine Waters (D-CA) exposed a so-called "rug pull" scam that was used to dupe thousands of people who bought President Donald Trump's crypto coin.
During Tuesday's House Financial Services Committee hearing, Waters noted that her "stablecoin" legislation differed from Trump's unregulated crypto coin.
"When Trump first issued his meme coin three days before his inauguration, I expressed my deep concern," she said. "I warned that this raised major conflicts of interest, national security risk for the country, and left consumers vulnerable to rug pulls, market manipulation, and more."
"Unfortunately, that has happened," she noted.
Witness Carole House, a senior fellow at the Atlantic Council, briefly explained rug pulls.
"Just basically, when people are trying to hype up and get people to invest in an asset and making a broader promise and then ultimately pulling out your investments in the assets, and ultimately that ends up normally crashing the market value," House said.
Waters argued that Trump's coin "raised major conflicts of interest, national security risk for the country, and left consumers vulnerable to these rug pulls, market manipulation, and more."
ALSO READ: 'Absolutely unconscionable': Ex-Republican demands Trump removed from office after fight
"Unfortunately, that's just what happened," she added. "President Trump's insiders reportedly earned a staggering $350 million from sales and fees in the three weeks after his meme coin was launched."
"While Trump ran away with his money, reports show that a far larger number of investors lost more than $2 billion after the meme coin crashed."
