Trump Family Takes Charge Of Crypto Firm After Raising $550 Million

In a significant shift within the crypto world, the Trump family has secured control of World Liberty Financial, a venture that raised over $550 million. According to Reuters, this control was secured after the company’s token sales gained significant traction following Donald Trump’s election win in November 2024.

World Liberty Financial was launched in late 2024 with the aim of removing middlemen such as banks and offering people decentralized financial services (DeFi). Despite raising substantial funds, World Liberty Financial remains in its early stages, with only a small staff and no public platform yet launched.

World Liberty Financial acquired $550 million by selling governance tokens, known as $WLFI, which provide holders voting rights over the project's progress but are not tradable. Reuters reported that most of the token sales occurred after Trump’s victory. These tokens allow holders to vote on the direction and code of the project but do not offer financial stakes.

In January, World Liberty disclosed that the Trump family had taken control of the business, replacing the original co-founders, Zak Folkman and Chase Herro. According to Reuters, the Trump family currently holds 60 per cent of the business, and they are entitled to 75 per cent of the net proceeds from token sales. The Trump family is entitled to over $400 million in fees under this arrangement with just 5 per cent of the funds raised going toward platform development.

Industry analysts are concerned that this power concentration violates DeFi's decentralized ideals. Reuters reported that Jim Angel an associate professor at Georgetown University and David Krause, a finance professor at Marquette University, the governance tokens are structured in a way that excludes meaningful financial participation from public investors, despite the large sums of money involved.

Although the Trump family’s involvement is significant, World Liberty has yet to launch its promised DeFi platform, and its small team continues to work on the project’s development. Some of the raised funds have been used to invest in other cryptocurrencies, though details remain sparse.

Also, Reuters noted that a review by CertiK, a cybersecurity company, found that the project’s blockchain contracts were still in development, with several functionalities yet to be fully implemented or operational.

The ongoing governance and transparency issues in the cryptocurrency sector are brought to light by this circumstance especially when high-profile individuals participate in initiatives that offer decentralized financial services.