Author: Chloe, PANews
Since last month, former US President Trump and his family have been promoting the DeFi project World Liberty Financial (WLFI), even claiming to ensure that the US becomes the capital of cryptocurrency on Earth. On September 17, the Trump family announced the official launch of World Liberty Financial, which will promote the adoption of stablecoins and enhance the dominance of the US dollar in the future. In order to meet regulatory compliance requirements, WLFI intends to become a fully SEC-regulated institution, with all buyers limited to US-accredited investors.
Endorsement by the Trump family and cryptocurrency figures, but no substantial information disclosed yet
At the end of last month, Donald Trump Jr., the eldest son of Trump, announced the launch of a DeFi-type cryptocurrency project, stating that the project aims to make finance great again and return power to the American people. On August 29, WLFI went live, providing cryptocurrency lending services on the Ethereum blockchain network, similar to a DeFi project resembling a crypto bank platform, and subsequently released some information.
During the press conference, Zak Folkman, responsible for WLFI's strategy and operations, stated that the project would not attempt to create completely novel, unprecedented financial instruments. Instead, the team may adopt existing concepts and technologies that have proven effective. The focus of WLFI is to simplify and improve existing solutions, rather than inventing entirely new financial products. "Our goal is to establish a project that is easy to use and simple, without the need to call a friend to teach you how to use it."
However, WLFI has not disclosed more operational modes, technical paths, or other substantial information, and is instead relying on the background of team members for publicity.
Looking at the team composition, in addition to members of the Trump family, there are also many cryptocurrency figures. The white paper shows that many members of the Trump family serve various roles in the WLFI team. Trump himself is listed as the "Chief Cryptocurrency Advocate" and endorsed the project at the WLFI launch event, expressing optimism about cryptocurrencies. After the event, he posted "FIGHT FIGHT FIGHT" and pinned the post, attempting to stir up community emotions, but did not express his views on the WLFI project itself. Trump's 18-year-old son Barron Trump is listed as the "DeFi Visionary" of the project, while Eric Trump and Donald Trump Jr. are both referred to as "Web3 Ambassadors," with Eric Trump revealed to be one of the helmsmen of WLFI.
Additionally, cryptocurrency practitioners are also important participants in WLFI. According to CNBC, in addition to Eric Trump, real estate investor Witkoff is also a decision-maker for WLFI, representing a new participant in the cryptocurrency industry. There are also many experienced cryptocurrency figures, as some WLFI members come from the DeFi project Dough Finance, which was targeted by hackers in the past few months. The white paper lists the founder of this project, including Zachary Folkman and Chase Herro, as the operational director, data and strategy director of World Liberty Financial.
In response to this, The Wall Street Journal has also criticized Zachary Folkman and Chase Herro, stating that their experiences are extraordinary compared to entrepreneurs with traditional financial or technological backgrounds. The Wall Street Journal mentioned that Chase Herro had a criminal record in the past, having been a habitual offender and serving time in prison (the article did not specify the criminal factors), and referred to himself as a "dirtbag of the internet," but later claimed to have reformed and achieved wealth through business transactions.
Herro and Folkman have been collaborating for a long time. Folkman founded a company called "Date Hotter Girls," which launched seminars to help men attract beautiful women for dating purposes. Folkman and Herro also have a series of collaborative business activities, initially located in the US Virgin Islands and later moved to Puerto Rico. Public records show that both of them own properties in Puerto Rico, where tax incentives have attracted a considerable number of cryptocurrency enthusiasts. In government databases, Folkman is one of thousands of residents enjoying tax exemptions in Puerto Rico.
Furthermore, according to reports from CCN and CoinDesk, WLFI's operation is very similar to Dough Finance. A review of a deleted GitHub code repository suggests that WLFI may have directly copied Dough Finance's code in the early stages. The white paper also "hints" that WLFI will adopt Dough Finance's codebase, although this information requires further confirmation, it has still caused some commotion in the market, as Dough Finance suffered a $1.8 million flash loan attack in July this year.
In addition to these two members, according to WLFI's official announcement, Corey Caplan, co-founder of Dolomite, is also an advisor to WLFI. The platform is a DeFi platform launched in 2022, positioning itself as a currency market platform and decentralized exchange (DEX) that provides trading, lending, and portfolio management. It was initially launched on Arbitrum One and now exists on several other blockchains. Alexei Dulub, founder of Web3 Antivirus and PixelPlex, has also joined the team as an advisor. According to WLFI, "Alexei has been a blockchain pioneer since 2013, building custom L1 and L2 to support today's Web3 projects."
Moreover, in terms of security, WLFI claims to have hired top security experts to conduct a "thorough review" of the project's code, including smart contracts and EVM audits by BlockSec and blockchain analysis and security company PeckShield. WLFI also intends to collaborate with Aave to develop its DeFi project, with the mission of promoting the widespread adoption of stablecoins and the development of DeFi to make cryptocurrency and the US "greater." The ultimate goal is to promote globally pegged stablecoins with the US dollar, a strategy aimed at maintaining the dominance of the US dollar and ensuring the country's leadership and influence on the global financial stage.
In addition, the WLFI team has provided very few actual details about the project itself, emphasizing only its usability. In response to this, Fox Business reporter Eleanor Terrett posted on X platform, suggesting that due to the lack of substantial information about the platform and its actual use, she received mostly negative feedback from the community (Trump had previously conducted X Space), indicating disappointment with the Trump family's DeFi project World Liberty Financial.
SEC-regulated, over 60% of WLFI tokens will be sold
WLFI will launch the governance token $WLFI, which will be non-transferable and will not provide additional economic rights, possibly to avoid violating securities laws. Under the strict US cryptocurrency regulatory environment, the token sale of $WLFI will be regulated by the US SEC. Only certified accredited investors can purchase $WLFI, and the token sale will be conducted under SEC's "Regulation D" exemption clause.
According to US securities laws, the issuance and sale of all securities can be compliant through two methods: first, registering securities with the SEC, which is the traditional path for equity listing, i.e., IPO, with high compliance costs and not suitable for cryptocurrency projects. Therefore, for most cryptocurrency projects, the latter, registering securities exemption, is the feasible path. Among these, registration exemptions can be based on Regulation D, Regulation S, Regulation A+, and other regulations.
Simply put, WLFI aims to use the Regulation D exemption to raise funds without registering securities with the SEC, by targeting qualified investors or conducting small-scale private placements.
According to Decrypt, the $WLFI token has no presale, venture capital, or early buy-ins, just like any other DeFi project that can be expected. The token distribution is very fair, with the majority of the supply being allocated in the upcoming token sale, and a portion of the net proceeds from this sale will go into the project's multi-signature wallet treasury reserve.
Based on the leaked white paper and information revealed by the team during the live broadcast, approximately 62.66% of the $WLFI token supply will be allocated in the upcoming token sale, followed by 17.33% reserved for user rewards and community development, and the remaining 20% will be allocated to the team, advisors, and future employees. The undisclosed portion of $WLFI will be allocated to the WLF Foundation, Trump Group affiliates, and the Witkoff Group. The team also revealed that the sale of $WLFI and all purchasers of $WLFI will undergo the same KYC standards as US cryptocurrency exchanges such as Coinbase and Kraken.
Although $WLFI has not been launched yet, there have been several related tokens in the market. In response, Eric Trump also cautioned the public to be wary of fake tokens claiming to be Trump projects, emphasizing that the only official project will be announced directly by the official team. "Do not be fooled, and stay tuned for the appearance of the genuine token."
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