World Liberty Financial (WLFI), a cryptocurrency venture run by the Trump family, secured over $550 million from investors worldwide, but concerns about conflicts between presidential power and private business interests remain.
What Happened: WLFI is 60% owned by a Trump family entity and has aggressively courted investors with deals that multiple industry executives described as ethically questionable, according to an investigation published on Tuesday by The New York Times.
The company approached at least five crypto startups offering “partnerships” that required them to purchase between $10 million and $30 million of World Liberty’s coins in exchange for smaller investments from Trump’s firm.
“It’s a black spot on our industry,” said Andre Cronje, founder of SonicLabs, which rejected World Liberty’s pitch.
Anyone accepting such deals would “obviously think they’re going to make money because it’s the officially endorsed Trump project.”
Several startups declined these arrangements, considering them “dishonest” according to Dominik Schiener, founder of the IOTA Foundation.
World Liberty successfully secured deals with other firms, including Ondo Finance, a Peter Thiel-backed startup that later donated $1 million to Trump’s inauguration.
The company’s spokesman, David Wachsman, defended these arrangements as “standard industry practices” that establish “skin in the game for all parties,” while denying they constituted “one-sided payment for services rendered.”
Why It Matters: World Liberty’s rise coincides with Trump’s reversal on cryptocurrency.
After previously dismissing digital assets as having value “based on thin air,” Trump has filled his administration with industry supporters, disbanded a crypto crimes task force, and announced a federal cryptocurrency stockpile that temporarily boosted the value of World Liberty’s holdings by $33 million.
The company has attracted numerous foreign investors from Singapore, Hong Kong and the United Arab Emirates, creating a legal avenue for overseas entities to potentially curry favor with the president.
One significant investor is Justin Sun, a Chinese billionaire facing SEC fraud charges whose case was recently suspended as the agency explores “a potential resolution.”
Eric Trump, who runs the family business with his brother Donald Trump Jr., called World Liberty “one of the more successful things we’ve ever done.”
The Trump family received 22.5 billion units of the company’s cryptocurrency -- worth approximately $1.1 billion on paper.
The company’s daily operations are managed by three partners with mixed track records: Zachary Folkman, who once ran a company called Date Hotter Girls; Chase Herro, who previously promoted a cryptocurrency that imploded; and Zach Witkoff, son of Trump’s Middle East envoy Steve Witkoff.
A Trump spokeswoman told the New York Times there are “no conflicts of interest” because the president’s assets are “in a trust managed by his children,” though this trust directly benefits President Trump.
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