WLFI surges after debut, crypto community pays $5 billion to Trump family

Author: Ye Zhen, Wall Street Journal

World Liberty Financial, a cryptocurrency project associated with the Trump family, made its market debut. Although its core token, WLFI, experienced a brief surge before quickly falling back, underperforming expectations, this did not prevent the Trump family from locking in substantial gains.

On Monday (September 1st), the highly anticipated WLFI token officially launched on major cryptocurrency exchanges including Binance, Bybit, and OKX. The token opened at 20 cents and soared to a high of approximately 40 cents within five minutes of opening, but the gains subsequently narrowed significantly. As of now, its price has fallen back to around 23 cents, performing below expectations. According to the rules, approximately 35,000 early buyers of the tokens, who purchased them for a total of approximately $550 million before this spring, were allowed to sell 20% of their holdings on Monday. Because their purchase costs were well below the opening price, many chose to immediately cash out. However, the tokens' secondary market performance did not affect the Trump family's earnings. The New York Times reported that disclosure documents show that an "unusual internal arrangement" with Nasdaq-listed Alt5 Sigma Corporation generated direct cash gains for Trump family entities that could potentially reach hundreds of millions of dollars. In short, the Trump family profited from a special arrangement, not from the token's price fluctuations. Publicly listed company Alt5 spent $1.5 billion on WLFI, with 75% of the sales proceeds going directly to the Trump family, instantly locking up hundreds of millions of dollars in cash. Furthermore, based on Monday's closing price, the 22.5 billion $WLFI tokens controlled by the Trump family have a book value of approximately $5 billion, making them one of Trump's most valuable assets, far exceeding his traditional real estate investments like hotels and golf courses. However, these tokens, held by the management team, are currently locked up and cannot be immediately sold. A special internal arrangement locked in the Trump family's massive gains. According to the New York Times, despite a lackluster market debut, the Trump family's substantial gains have been secured through another channel. According to World Liberty's disclosure documents, this was achieved through an unusual agreement with Nasdaq-listed Alt5 Sigma Corporation. In August, Alt5 announced the appointment of World Liberty Financial co-founder Zach Witkoff as its chairman, President Trump's son Eric Trump as a board member, and another executive, Zachary Folkman, as a board observer. These appointments gave three World Liberty executives leadership positions at Alt5. Along with the leadership changes, Alt5 also disclosed plans to use the $1.5 billion it had raised to purchase WLFI when it began trading on Monday. In a statement on Monday, World Liberty confirmed the sale of over 7.5 billion tokens, representing approximately 8% of the total supply, to Alt5. The transaction was the largest token sale in the market that day. According to the project's founding agreement, in return for Trump's endorsement and family involvement in management, a Trump family entity called DT Marks DEFI was entitled to receive 75% of the net proceeds from the $WLFI token sale. The sale to Alt5 is expected to generate hundreds of millions of dollars in cash proceeds for the Trump family. Conflict of Interest Controversy and Market Reaction The close corporate ties between Alt5 and World Liberty have drawn scrutiny over potential conflicts of interest. John Reed Stark, a lawyer who served on the SEC for two decades, said the most striking thing about this series of business operations is the Trump family's openness about their money-making efforts. "They have a clear conflict of interest with their role as president," Stark said. "But what's remarkable is that everything they do is out in the open. In the past, these connections would have been hidden, but now the presidential family is displaying them like a badge of honor." Trump's sons, Eric Trump and Donald Trump Jr., both celebrated WLFI's listing on social media on Monday. Eric Trump himself is currently visiting Japan after attending two cryptocurrency-related events in Hong Kong to promote his company's products. Meanwhile, some industry news outlets have reported that the project's relationship with Alt5 may be under scrutiny by the U.S. Securities and Exchange Commission (SEC), but Alt5 has denied these reports. Neither Eric Trump nor World Liberty responded to requests for comment as of Monday. With the launch of WLFI trading, the Trump family's cryptocurrency wealth has seen a significant jump. As of Monday afternoon, the 2.25 billion WLFI tokens under their control were worth approximately $5 billion. Furthermore, the holdings of their partners are also substantial. The Witkoff family and other investors, including Chase Herro and Zachary Folkman, each control 3.75 billion tokens. Based on Monday's closing price, the partners' total holdings are worth approximately $1.7 billion. However, this wealth currently exists only on paper. World Liberty announced on Monday that the tokens held by the management team, including the Trump family, the Witkoff family, and other partners, are still locked up and cannot be sold on the open market.