Former President Donald Trump has officially entered the crypto space with the announcement of World Liberty Financial, a decentralized finance (DeFi) initiative centered around a new crypto token called WLFI.
The development comes after months of speculation and hints from the former President, including his attendance at the 2024 Bitcoin conference in Nashville and discussions on social media, where he promised, among other things, to use the largest cryptocurrency on the market as a means to reduce the country’s $35 trillion national debt.
Background on Trump’s Crypto Journey
During a recent live session on X (formerly Twitter), Trump detailed key aspects of the World Liberty Financial project. The initiative involves several lesser-known entrepreneurs, including Chase Herro, who has branded himself as the “Dirtbag of the Internet.”
Notably, Trump’s sons, including Barron, a student at New York University, are also playing significant roles in the venture. However, according to a recent Fortune report, concerns about the governance structure have been raised, which crypto advocates have criticized for its lack of transparency.
Hints about World Liberty Financial began circulating in August, with posts on his social media platform, Truth Social. The project aims to support unbanked and underserved communities, although its implementation has raised questions.
Trump’s interest in cryptocurrency has evolved since 2022, when he launched a successful non-fungible token (NFT) trading card collection that sold out within a day, generating nearly $5 million in sales.
Despite previously labeling Bitcoin a “scam” and supporting regulatory crackdowns on digital assets, the success of his NFT venture seems to have softened his stance.
As crypto-focused Super political action committees (PACs) have emerged as significant fundraisers for the 2024 election, Trump has increasingly courted blockchain entrepreneurs.
Token Details and Launch Information
Per the report, World Liberty Financial will feature a governance token, WLFI, which will be nontransferable and will not earn yield. This structure could deter potential investors, particularly since the token will only be available to accredited investors with a net worth exceeding $1 million.
Fortune’s report contends that this approach may conflict with the project’s mission of helping underserved communities by effectively limiting access to wealthier individuals.
While specific launch details were not provided during the announcement, it was revealed that 63% of the tokens would be sold to the public, with 20% allocated to the project team. However, the project faces several concerns, including security issues raised by skeptical Democrats.
Concerns And Implications
Earlier reports alleged that the language in the leaked white paper was “very similar” to that of Dough Finance, a DeFi application that was the victim of a hack earlier this year.
Furthermore, the governance structure raises potential conflict-of-interest questions, reminiscent of Trump’s critiques during his presidency regarding his various business interests, including hotels and resorts.
Critics worry that launching a new crypto token could lead to “regulatory favoritism,” with fears that Trump might leverage his influence to sway regulators in favor of his business ventures.
As the US Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) ramp up enforcement actions against similar crypto companies, the implications of Trump’s foray into cryptocurrency could reverberate through the regulatory landscape.
However, this is just speculation for now until there are more details on the project and the SEC’s regulatory approach to World Liberty Financial and its upcoming token.
It remains to be seen how the team behind the project will address these concerns raised by the critics and weather the regulatory storm led by crypto-skeptic SEC Chairman Gary Gensler.
At the time of writing, BTC has been trading at $61,160, up 6% in the last 24 hours.
Featured image from CNN, chart from TradingView.com