World Liberty Financial, a crypto venture promising decentralized finance for all, has raised over half a billion dollars, but a closer look reveals a surprising twist: the Trump family has taken control, positioning themselves to collect the lion’s share of the funds.
Reuters’ investigation exposes governance terms that industry experts are calling unusually favorable to insiders, raising concerns about the project’s true decentralization and the potential for conflicts of interest.
From DeFi dream to Trump dynasty
Launched last fall, World Liberty aimed to revolutionize financial services by offering cryptocurrency-based solutions without traditional intermediaries.
This vision of decentralized finance (DeFi) promised to empower individuals, but the project’s progress has been slow.
Despite its ambitious goals, World Liberty has yet to launch a public platform and boasts only a small staff, according to project reviews.
However, World Liberty announced in mid-March that it had raised a staggering $550 million through the sale of governance tokens, known as $WLFI.
Reuters’ analysis reveals that the majority of these sales occurred after Donald Trump’s election victory in November.
These tokens are designed to grant holders voting rights on changes to the project’s underlying code and to express their opinions on its direction.
Crucially, they cannot be traded, limiting their potential value to external investors.
A quiet takeover: the Trump family assumes control
As World Liberty’s fundraising gained momentum, a significant change occurred behind the scenes.
In January, subtle revisions to the fine print on the project’s website revealed that the Trump family had quietly assumed control of the business.
The original co-founders, crypto entrepreneurs Zak Folkman and Chase Herro, were replaced as the controlling parties by an entity in which the Trump family holds a commanding 60% stake.
This change in leadership has not been previously reported.
The lion’s share: millions flow to the Trump family
The revised ownership structure grants the Trump family a claim on 75% of net revenues from token sales and 60% from World Liberty’s ongoing operations, once the platform is operational.
This arrangement entitles the Trump family to approximately $400 million in fees.
After the original co-founders receive their share, World Liberty will be left with just 5% of the $550 million raised to build the platform, according to Reuters’ calculations.
Centralization concerns: is World Liberty truly decentralized?
The terms of the arrangement, particularly the Trump family’s substantial share of revenues and the non-tradeable nature of the governance tokens, raise concerns about World Liberty’s commitment to decentralization.
Experts in the DeFi space, including academics and analysts, note that the project’s structure is unusually centralized compared to other leading DeFi platforms.
“It’s hard for me to see any economic benefit to the owner of these tokens,” said Jim Angel, an associate professor at Georgetown University who has written extensively on DeFi regulation.
David Krause, a finance professor at Marquette University who recently published a study of World Liberty, argues that the project’s structure “pretty much excludes public investors or token holders from any meaningful financial participation.”
A White House spokesperson referred inquiries about World Liberty to the Trump Organization, according to Reuters.
Despite repeated requests, the Trump Organization’s chief legal officer and the president’s two oldest sons, who are executives at the company, did not respond to requests for comment.
The Trump Organization announced in January that the president’s investments, assets, and business interests would be held in a trust managed by his children, and that he would play no role in day-to-day operations or decision-making.
The family’s business also retained an attorney to serve as an ethics advisor to “avoid any perceived conflicts of interest.”
Folkman and Herro also did not respond to questions from Reuters. However, World Liberty stated on X on March 14 that it “is a DeFi project with a tremendous mission to build and democratize a new financial system for the benefit of millions.”
At a conference in February, Herro stated that the plan was to open crypto investing to everyday Americans.
Donald Trump Jr., the president’s son, has previously complained about the family being excluded from traditional banking since his father’s first term.
A “crypto president” and his family’s fortune
The Trump family’s involvement in World Liberty links the personal finances of a sitting US president to a volatile and largely unregulated asset class.
Trump has publicly declared his intention to be the “crypto president,” promoting the mainstream adoption of cryptocurrencies in America.
He has stated that he supports crypto because it can improve the banking system and strengthen the US dollar.
Simultaneously, the Trump family has rapidly established a significant presence in the crypto world, amassing hundreds of millions of dollars.
A meme coin endorsed by Trump has reportedly generated at least $349 million in fees for entities connected to the president, according to data from Chainalysis.
Further expanding their crypto holdings, a company formed with Trump’s elder sons, Eric and Donald Trump Jr., recently acquired a minority stake in a newly formed bitcoin producer called American Bitcoin.
Eric Trump is slated to become the chief strategy officer of the new firm.
Ethics concerns and potential conflicts of interest
The prospect of Trump and his family profiting from deregulation has drawn criticism from political opponents and government ethics experts, who argue that it creates potential conflicts of interest and opportunities for influence peddling.
“You’ve got the guy in charge who is responsible for his own regulation,” said Ross Delston, a former US banking regulator.
Delston also raised concerns about individuals buying $WLFI tokens to curry political favor, calling it the “perfect vehicle” for governments or oligarchs to funnel money to the president.
World Liberty has attracted wealthy investors, with almost 70% of the funds raised coming from wallets that spent at least $100,000, and more than 50% from buys of $1 million or more, according to a Reuters analysis.
While these investors provided their names to the venture, their identities are shielded from public view by anonymous crypto wallets.
Several of the identified investors told Reuters that they were drawn to the token because they believed Trump’s involvement would help it succeed.
The Witkoff connection: how it all began
World Liberty’s origins trace back to the intersection of two relatively unknown figures in the crypto space and some of the most influential individuals in American politics.
Folkman and Herro gained access to Trump’s inner circle through the family of New York real estate magnate Steve Witkoff, a longtime friend of Trump’s and currently his envoy to the Mideast.
Witkoff stated that he was introduced to the pair by one of his sons during a conversation about the genesis of the deal on a crypto podcast hosted in September by the Trump family.
After meeting with the two crypto entrepreneurs and hearing about the difficulties of securing credit in traditional finance, Witkoff said he connected them with the Trumps.
He arranged a meeting with Donald Trump and his two eldest sons for Herro and Folkman to pitch the opportunities of DeFi. According to Witkoff, the Trumps were immediately captivated.
Slow start, then a surge after Trump’s election
Despite Trump’s endorsement, token sales initially lagged.
A US regulatory filing dated October 30 revealed that the venture had only raised $2.7 million at that point.
However, on November 25, less than three weeks after Trump’s election, Justin Sun, a Hong Kong-based crypto entrepreneur, announced a $30 million investment in $WLFI, which the company said was the amount it needed to get started.
After that, Sun’s personal wealth in the scheme rose to 75 million. As the single-largest investor, he’s also become an advisor to the platform.
A closer look at World Liberty’s operations
World Liberty states that it is developing three primary products, including a “lend and borrow” market and a personal finance application.
The company also plans to launch a stablecoin, known as USD1, backed by assets like US Treasuries.
CertiK, a cybersecurity firm that audits crypto projects, found that, as of late March, the underlying coding for contracts on the project’s blockchain were in progress.
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