Former U.S. President Donald Trump is diving into the world of decentralized finance (DeFi) with the launch of a new venture, World Liberty Financial (WLFI), and its associated token. This new project has sparked significant controversy, raising concerns about its impact on both his presidential campaign and the broader cryptocurrency industry’s reputation. Critics are concerned that the venture could be a “pump-and-dump disaster,” while others argue it could shine a light on the crypto space, albeit in a controversial way.
Trump Ventures into DeFi with WLFI
Trump, known for branding a variety of eccentric products, is reportedly putting his personal touch on World Liberty Financial and its token. The project’s exact purpose is still unclear, but WLFI is positioned as a DeFi protocol—a space that allows individuals to engage in financial transactions without intermediaries like banks.
This isn’t Trump’s first foray into alternative markets. He’s previously launched products ranging from gold sneakers and silver coins to NFTs and watches, but his move into the crypto sector has raised eyebrows within both political and financial circles. Some see the project as a clever marketing move, while others fear it could harm Trump’s candidacy and contribute to further negative perceptions of the cryptocurrency market.
Criticism from Mark Cuban and Industry Insiders
Many prominent figures in the crypto world have expressed skepticism. Mark Cuban, a billionaire investor and supporter of Vice President Kamala Harris, was quick to dismiss the project. He said that while he is a fan of DeFi, he sees no value in yet another token in an already crowded market, calling it a “desperate marketing scheme” by Trump. Cuban pointed out that Trump has been selling a variety of products over the years, but nothing truly innovative in the DeFi space.
On the other hand, David Nikzad, co-founder of DeFi.Gold, took a more optimistic view. He believes that Trump’s entry into the crypto world could attract significant attention and possibly bring mainstream legitimacy to DeFi, which he describes as a sector still finding its footing. Nikzad added that Trump’s ability to engage large audiences could be a powerful tool for driving crypto adoption.
Legal and Political Risks for Trump
One of the most concerning aspects of WLFI’s launch is the potential legal risks for Trump. Nic Carter, a blockchain investor and co-founder of Castle Island Ventures, publicly called for a petition to halt the project, fearing it could be a “distraction” or even lead to legal issues. Carter expressed concern that the U.S. Securities and Exchange Commission (SEC), led by Gary Gensler, could target WLFI, as it appears to be in clear violation of regulatory norms around token offerings and could easily attract enforcement actions. Given the SEC’s strict stance on crypto regulation, Trump’s DeFi project could be seen as a prime candidate for scrutiny.
Trump’s Political Risks: A Potential “Conflict of Interest”
Another issue raised is the timing of the WLFI launch, as it occurs just weeks before the 2024 presidential election. Anthony Scaramucci, a former communications director for Trump and the founder of SkyBridge Capital, argued that the project could be a breach of political norms, as it would be the first time a presidential candidate has launched a token or financial product right before an election. He views the project’s timing as intentional, suggesting that if Trump wins, he could potentially shield WLFI from legal scrutiny—a potential conflict of interest that could harm both his candidacy and his campaign’s credibility.
Scaramucci also expressed concerns about the project’s legitimacy, calling WLFI a “scammy grift” that threatens to undermine the legitimate digital finance industry. He pointed out that WLFI’s tokenomics favor the founding team, with 20% of tokens allocated to them, including the Trump family, and only 63% reserved for the public, with no pre-sales or early buy-ins.
Potential for a “Pump-and-Dump” Scheme
Further raising concerns, Scaramucci speculated that WLFI could be a “pump-and-dump disaster”. He pointed out that the speculative nature of DeFi tokens—especially those with questionable marketing tactics—often leads to inflated values followed by rapid crashes, leaving retail investors holding the bag.
Some supporters of Trump’s candidacy see the launch of WLFI as a way to push back against the SEC’s overreach. Nick Passino, co-founder of the MAGA Meme PAC, believes that Trump should proceed with the project, even if it risks SEC scrutiny. He argued that this could turn the tables on the current administration, which he believes has weaponized agencies like the SEC against Trump. Passino also sees WLFI as an opportunity to provide a decentralized financial system that bypasses traditional banking systems, benefiting the average person.
What’s Next for WLFI?
Despite the controversy, WLFI’s team has continued to expand, adding new members to its advisory board, including figures like Sandy Peng, co-founder of Ethereum scaling solution Scroll, and Matt Morgan, a game developer from Mixie AI. However, the project’s roadmap and specific functionality remain unclear, and there are growing concerns about its long-term viability.
As the 2024 election draws closer, WLFI’s fate—and its impact on both the crypto industry and Trump’s political future—remains uncertain. Some argue that the project should be delayed until after the election to avoid any potential damage to Trump’s candidacy, while others fear that it could set a dangerous precedent for the intersection of politics and cryptocurrency.
In the meantime, the crypto industry is watching closely to see if WLFI becomes a success, a cautionary tale, or a political liability.
