Allegations of Financial Misconduct Emerge
Allegations claim the Trump family siphoned at least $5 billion from the World Liberty Financial ($WLFI) crypto project. This sum reportedly includes $390 million in direct cash and $550 million from private $WLFI token sales. The $WLFI project was launched in 2024 with a 100 billion token supply.
Project Structure and Core Controversy
World Liberty Financial ($WLFI) operates its own lending platform, World Liberty Markets (Dolomite). The controversy stems from the project’s strategy of borrowing stablecoins using its native $WLFI tokens as collateral. Critics flagged the illiquidity of $WLFI at the scale it was used for collateral, noting the high capital limit for an illiquid asset as a risk management failure. This approach, reminiscent of past DeFi exploits involving illiquid collateral, was problematic due to $WLFI's lack of market depth, which prevented large sales without severe price impact and hindered yield generation.
Timeline of Events and Financial Maneuvers
The $WLFI project borrowed $75 million in stablecoins by collateralizing 5 billion of its own tokens on Dolomite, including 3 billion $WLFI governance tokens that secured $50.44 million in its stablecoin, $USD1, on its World Liberty Markets platform. This move strained the lending pool, contributing to a 1.3% 24-hour price decrease for $WLFI and a 19.2% 7-day decrease, reaching $0.079869. Community sentiment registered broadly negative, with discussions reflecting scores from -60 to -98.
Reports detail a purported $150 million “rugpull” from Dolomite, allegedly executed by the Trump family using illiquid $WLFI from the project’s treasury, preventing users from recovering staked funds. Following these events, $WLFI plummeted to an all-time low of $0.07714, an 83% collapse from its September peak. Over seven months, $WLFI lost $13 billion from its market value, including a $427 million market cap erasure after a DeFi loan and token unlock proposal.
Over $40 million of the borrowed stablecoins was transferred to Coinbase Prime. At the time, $WLFI comprised 55% of Dolomite's total collateral.
U.S. Senators launched an investigation into World Liberty Financial and “Trump tokens,” targeting the $550 million in token sales and potential “pay-to-play” schemes, following reports of a $500 million UAE-backed investment. $WLFI repaid $15 million in $USD1 stablecoins, followed by an additional $10 million two days later, totaling $25 million settled on its WLFI Markets position.
The public association of the Trump family with the project shifted over time. Initially listed as “co-founders” before the $WLFI presale, their designation shifted to “ambassadors” post-presale, then their names were removed from the website. Eric Trump deleted his $WLFI tweets weeks before allegations surfaced. Tron founder Justin Sun’s frozen $WLFI holdings took an $11 million hit, with some data suggesting losses over $80 million.
Ongoing Investigations and Project Responses
On-chain analytics continue to show high leverage ratios and low liquidity, contributing to market skepticism, as reflected in community sentiment scores ranging from -60 to -98. The U.S. Senators’ investigation into World Liberty Financial and “Trump tokens” remains ongoing. World Liberty Financial officials deny liquidation risk, stating the firm operates as both a supplier and borrower using $WLFI as collateral. The project is also preparing a governance vote for the phased unlock of the $WLFI token, a proposal that has drawn further scrutiny from analysts concerned about potential supply shocks.