Truth Social has started a subscription service to get early access to United States President Donald Trump‘s announcements, which he makes exclusively on the social media platform. Not only the US President (who has the highest number of followers; 13 million+), the users will get early access to the posts from all popular and influential people on the platform.
Of late, Trump has made critical announcements via Truth Social platform even before his administration’s official release via conventional channels. This has made the social media platform a hot ground for policy news or major announcements directly via the President. According to multiple reports, Trump Media has planned to charge $100,000 a month for the Truth API product.
Critics call it corruption
Irene Aldridge, head of Able Alpha Trading told AP that what Truth Social and Trump are doing, amounts to straight up corruption.
“If this was the CEO of a public company, this would be jail time. We have a President of the United States who has the front seat to all the action, who makes all the decisions, and he’s disclosing this ahead of time to a select group,” she further said.
Trump Media responds to criticism
Though there were no comments from the White House, Trump Media and Technology criticized the opposition on their stance on the subscription scheme. “Senate Democrats continue to mischaracterize Truth API either out of ideological opposition to free markets or a failure to grasp the distinction between public and nonpublic information — or, quite possibly, both,” a Trump Media spokesperson told Reuters.
Market manipulation or insider trading?
No formal allegations have been made in this matter. However, the prospect of policy or security decisions reaching some parties before they are announced publicly has raised questions about whether access to the President tracks financial proximity. Anyone receiving such information early would hold a first-mover advantage in the markets, where trading ahead of an announcement can be highly profitable.
Interim CEO of Truth Social Kevin McGurn said that Truth API would give users early access to ‘direct, licensed, real-time feed of the platform’s most “market-moving Truths”.
“For the big guys, it’s going to be something they need,” AP quoted Joe Saluzzi, co-founder of Themis Trading, who estimates about 100 of high frequency firms might be willing to pay for the service. “It’s market-moving information.
Individuals, trading firms receive posts at same time: That’s the problem
Though individual subscribers as well as the trading firms will receive every paid access information at the same time, Themis Trading’s Saluzzi, a critic of high speed trading, pointed out that this same time availability is the biggest issue.
“Somebody who buys the info and has a system built to process it will be able to act quicker than you and me,” Saluzzi told AP, adding in reference to everyday, small stock buyers, “The loser is always the retail investor.”
Why Trump Media needs big money?
Though Trump has popularised Truth Social to an extent, the stocks of the parent company, Trump Media and Technology, have plunged 75% since he took office last year.
Thus, if the news posted by the President becomes a market mover and is exclusive to paid customers, the sales will most likely go through the roof as every trader will need that info. Thus, this decision could go a long way in repairing the losses.
What do the opposition say?
Democratic senators Adam Schiff and Elizabeth Warren had written to the Securities and Exchange Commission, showing concern about blatant use of power by the POTUS.
In a letter to SEC chair Paul Atkins, the senators wrote, “This appears to be an outrageous abuse of the President’s office for his personal benefit that undermines everyday investors and the integrity of our markets, while enriching Wall Street and other wealthy insiders.”