Trump crypto venture WLFI is a ‘huge mistake,’ investor says

The Trump family’s latest business venture — initially introduced as a DeFi platform under the name “The Defiant Ones,” but later rebranded as World Liberty Financial — has been riddled with controversy just days after its unveiling.

While Trump’s eldest sons Eric Trump and Donald Trump Jr. are “ambassadors” for World Liberty Financial, CoinDesk reports that the company once known as “Defiant” is also connected to individuals involved in liquidity protocol Dough Finance.

Recall that Dough Finance lost $1.8 million worth of Ethereum (ETH) and USD Coin (USDC) in a flash loan attack that occurred on July 12.

Zachary Folkman and Chase Herro — the duo who founded Dough Finance — are also the bosses of the new Trump-led firm. They founded Date Hotter Girls LLC and crypto-focused Pacer Capital, respectively.

Trump first promoted the decentralized finance project in a post on Truth Social on August 22. He posted about it again on August 29 (when it was called World LibertyFi).

Two of his family members’ X accounts were later compromised and used to promote a fake Solana-based memecoin, with one of the targets being Lara Trump, co-chair of the Republican National Committee.

The whole venture strikes a questionable chord with crypto venture capitalist and Trump supporter Nic Carter, who hasn’t been outspoken about it either. “This is a huge mistake,” he says, according to Politico. “It looks like Trump’s inner circle is naively taking advantage of his recent embrace of crypto and, frankly, burning a lot of the goodwill that’s been built up with the industry to date.”

“Good faith?” It’s also worth noting that some of the industry’s most famous names have been found guilty of fraud.

Former Binance CEO Changpeng Zhao was sentenced to four months in prison; crypto entrepreneur Do Kwon spent more than six months in a Montenegrin prison; and FTX founder Sam Bankman-Fried was sentenced to 25 years in prison.

Trump is also no stranger to having his business ventures clouded by illegalities (see: Donald J. Trump Foundation and Trump University), and he is the first former US president to be convicted of a felony.

Trump, crypto and trust

Trump, who once said he was “not a fan” of Bitcoin (BTC), has been using pro-cryptocurrency policies in his campaign speeches ahead of the 2024 presidential election.

In May, he became the first major political candidate to accept crypto donations. Crypto celebrants then followed up with a series of promises if Trump were re-elected: a government-backed crypto reserve and the firing of oft-criticized current Securities and Exchange Commission chairman Gary Gensler.

I am not a fan of Bitcoin and other Cryptocurrencies which are not money and whose value is highly volatile and in the air. Unregulated Crypto Assets can facilitate illegal behavior including drug dealing and other illegal activities….

— Donald J. Trump (@realDonaldTrump) July 12, 2019

His 180-percent performance earned him the support and financial backing of deep-pocketed individuals like Cameron and Tyler Winklevoss, founders of the Gemini exchange, who each donated $1 million worth of Bitcoin to the former president.

But since then, scammers have targeted the so-called “MAGA” base with fake crypto websites and misleading donation centers. In June, a London-based cybersecurity firm called Netcraft began tracking multiple attacks related to the Trump campaign and discovered fraudulent donation schemes and phishing attempts.

The recent scrutiny surrounding World LibertyFi and World Liberty Coin is no different.

The Trump brothers have been hinting for weeks at a financial venture that would challenge traditional banking. And when it launched, scammers had plenty of new fodder to work with.

Carter, who continues to support Trump (because “Trump himself is only tangentially involved”), warns that the Freedom in the World project is “really damaging” the Republican candidate’s electoral prospects. Polls show the presidential race against Democratic Vice President Kamala Harris extremely tight.

“This is going to be the most attractive DeFi target yet, and it’s derived from a protocol that was itself hacked. [It’s] “It’s also an obvious target for the SEC,” he wrote on Sept. 3. “At best, it’s an unnecessary distraction, at worst, it’s a huge embarrassment and a source of (additional) legal problems.”

Is there anything we at Crypto Twitter can do collectively to stop the launch of World Liberty Coin? I think it would really hurt Trump’s election prospects, especially if it gets hacked (it would be the juiciest DeFi target yet, and it’s also…

— nic carter (@nic__carter) September 4, 2024