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Author: Ye Zhen, Wall Street News
World Liberty Financial, a cryptocurrency project linked to the Trump family, has made its market debut. Although its core token WLFI quickly fell back after a brief surge and performed worse than expected, this did not affect the Trump family’s lock in huge profits.
On Monday (September 1), the highly-watched WLFI tokens were officially traded on mainstream cryptocurrency exchanges such as Binance, Bybit and OKX.The token opened at 20 cents, soaring rapidly to a high of about 40 cents within five minutes of opening, but then the gains narrowed significantly.As of now, its price has fallen back to around 23 cents, performing lower than expected.
Under the rules, about 35,000 early buyers who bought tokens for a total price of about $550 million by the spring of this year were allowed to sell 20% of their positions on Monday.Since their buying cost is much lower than the opening price, many people choose to take profit immediately.
However, the secondary market performance of the tokens has not affected the Trump family’s earnings.The New York Times reported that disclosure documents show that an “extraordinary internal arrangement” with Nasdaq-listed Alt5 Sigma Corporation has brought direct cash gains that could be as high as hundreds of millions of dollars for the Trump family entity.In short, the Trump family relies on special agreements and does not rely on token rise and fall to make money.Listed company Alt5 spent $1.5 billion to buy WLFI, of which75% of sales revenue goes directly to Trump’s family pocket, instantly locking hundreds of millions of dollars in cash.
In addition, based on Monday’s closing price, the 22.5 billion $WLFI tokens controlled by the Trump family are worth about $5 billion on the book, making it one of Trump’s most valuable assets, far exceeding traditional real estate investments such as hotels and golf courses.However, this part of the tokens held by the management team is still locked and cannot be sold immediately.
Special internal arrangements lock in huge profits of Trump family
According to the New York Times, despite a dull debut in the market, the huge profits of the Trump family have been guaranteed through another channel.According to World Liberty’s disclosure documents, this is due to an abnormal agreement reached 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 member of the board, and another executive, Zachary Folkman, became an observer of the board.This series of appointments has enabled three World Liberty executives to acquire leadership positions at Alt5.
While announcing leadership changes, Alt5 also disclosed that it plans to use the $1.5 billion it raised to purchase when WLFI started trading on Monday.World Liberty confirmed in a statement Monday that it had sold more than 7.5 billion tokens, or about 8% of the total supply, to Alt5.This transaction was the largest token transaction on the market that day.
According to the agreement at the time of the project, in return for endorsement of Trump himself and family participation in management, a Trump family entity named DT Marks DEFI is entitled to “75% of the net income from $WLFI token sales”.The deal, sold to Alt5, is expected to bring hundreds of millions of dollars in cash to the Trump family.
Conflict of Interest and Market Reactions
The close corporate ties between Alt5 and World Liberty have triggered an outside world’s scrutiny of potential conflicts of interest.
John Reed Stark, a lawyer who has served at the SEC for 20 years, said the most surprising thing about the series of business operations is the Trump family’s openness to its money-making efforts.
“They have a clear conflict of interest with the presidential role,” Stark said, “but it’s worth noting: Everything they do is on the surface. In the past, this connection would have been hidden, and now the presidential family displays them like a celebrating the Medal of Honor.”
Trump’s sons Eric Trump and Donald Trump Jr. both celebrated the listing of WLFI on social media on Monday.Eric Trump himself is visiting Japan after he participated in two cryptocurrency-related events in Hong Kong to promote the company’s products.
Meanwhile, the relationship between the project and Alt5 may be under review by the Securities and Exchange Commission (SEC), according to some industry news agencies, but Alt5 denied the reports.As of Monday, neither Eric Trump nor World Liberty responded to media requests for comment.
Book wealth reached US$5 billion, but liquidity is limited
With WLFI trading online, the Trump family’s cryptocurrency wealth has made a leap on the books.As of Monday afternoon, the 2.25 billion WLFI tokens it controlled were worth about $5 billion.
In addition, the partners’ positions are also valuable.The Witkoff family, along with other investors including Chase Herro and Zachary Folkman, controls 3.75 billion tokens, and the total holdings of these partners are worth about $1.7 billion at Monday’s closing price.
However, these wealth is only on paper at the moment.World Liberty issued an announcement on Monday stating that tokens held by management teams including the Trump family, the Witkoff family and other partners are still locked and cannot be sold on the open market.
