Written by Chloe, PANews
Last month, former US President Trump and his family began to warm up for the DeFi project World Liberty Financial (WLFI), and even claimed that they would ensure that the United States would become the cryptocurrency capital of the planet. On September 17, the Trump family announced that World Liberty Financial was officially launched, which will promote the adoption of stablecoins and enhance the dominance of the US dollar in the future. In order to meet regulatory compliance requirements, WLFI intends to become a fully SEC-regulated institution, that is, all buyers are limited to investors approved by the United States.
Supported by the Trump family and crypto professionals, but no more substantive information has been disclosed
At the end of last month, Donald Trump Jr., the eldest son of Trump, announced that he would launch a DeFi-type crypto project, saying that the project aims to make finance great again and return power to the American people. On August 29, WLFI went online. The project provides cryptocurrency lending services on the Ethereum blockchain network, similar to the DeFi project of the crypto banking platform, and subsequently released some information.
At the launch event, Zak Folkman, who is responsible for WLFI's strategy and operations, said the project would not attempt to create completely new and unprecedented financial instruments. Instead, the team may adopt existing concepts and technologies that have been proven to be effective. WLFI's focus is on simplifying and improving existing solutions rather than inventing new financial products. "Our goal is to build easy-to-use and simple projects, so you don't have to call a friend to teach you how to use it."
However, WLFI did not release more substantive information such as its operating model and technical path, but instead used the background of its team members to create momentum.
Judging from the team members, in addition to members of the Trump family, there are also many crypto people. The white paper shows that many members of the Trump family play various roles in the WLFI team. Among them, Trump was listed as the "Chief Cryptocurrency Advocate". He endorsed the project at the WLFI press conference, including expressing his optimism about cryptocurrencies, and after the meeting, he posted "FIGHT FIGHT FIGHT" again and pinned it to the top, trying to incite community sentiment, but did not express his views on the WLFI project itself; Trump's 18-year-old son Barron Trump was listed as the "DeFi visionary" of the project, Eric Trump and Donald Trump Jr. were both called "Web3 Ambassadors", and Eric Trump was revealed to be one of the helmsmen of WLFI.
At the same time, crypto practitioners are also important participants in WLFI. According to CNBC, people familiar with the matter revealed that in addition to Eric Trump, real estate investor Witkoff is also a decision maker of WLFI, which is a new participant in the crypto industry. Of course, there are many experienced crypto people, such as some members of WLFI from Dough Finance, a DeF project that was hacked a few months ago. The white paper lists the founders of the project, including Zachary Folkman and Chase Herro, as the operations director and data and strategy director of World Liberty Financial.
In this regard, the Wall Street Journal also criticized Zachary Folkman and Chase Herro in its report, saying that their experiences were unusual compared to entrepreneurs with traditional financial or technology backgrounds. The Wall Street Journal mentioned that Chase Herro had a criminal record in the past. He was a repeat offender and had been in prison when he was young (the article did not mention the criminal factors). He called himself a "dirtbag of the internet". Later, he claimed that he had reformed and successfully made a fortune through business transactions.
Herro and Folkman have been working together for a long time. Folkman founded a company called "Date Hotter Girls", which launched teaching seminars to help men attract beautiful women to achieve dating goals. Folkman and Herro also have a series of cooperative business activities, which were initially located in the U.S. Virgin Islands and later moved to Puerto Rico. Public records show that both of them own properties in Puerto Rico. Puerto Rico's tax exemption policy attracts a considerable number of cryptocurrency enthusiasts. In the government database, Folkman is one of thousands of residents who enjoy tax exemptions in Puerto Rico.
Not only that, according to CCN, CoinDesk reported that WLFI operates very similarly to Dough Finance, and a review of a deleted GitHub code base showed that WLFI seemed to have directly plagiarized Dough Finance's code, at least in the early stages. The white paper also "implies" that WLFI will adopt Dough Finance's code base. Although this information needs further confirmation, it still caused some noise in the market because Dough Finance suffered a $1.8 million flash loan attack loss in July this year.
In addition to these two members, according to the official announcement of WLFI, Dolomite co-founder Corey Caplan is also an advisor to WLFI. The platform is a DeFi platform launched in 2022, positioning itself as a money market platform and decentralized exchange (DEX) that provides trading, lending and portfolio management. It was originally launched on Arbitrum One and now exists on several other blockchains. And Alexei Dulub, founder of Web3 Antivirus and PixelPlex, has also joined the team as an advisor. According to WLFI description: "Alexei has been a blockchain pioneer since 2013 and has built custom L1 and L2 to support today's Web3 projects."
In addition, in terms of security, WLFI claims that they have hired top security experts to conduct a "thorough review" of the project code, including smart contract and EVM auditing company BlockSec and blockchain analysis and security company PeckShield. At the same time, WLFI also intends to work with Aave to develop its DeFi project, with the mission of making cryptocurrencies and the United States "greater" by promoting the large-scale adoption of stablecoins and the development of DeFi. The ultimate goal is to promote stablecoins pegged to the US dollar worldwide. This strategy aims to maintain the dominance of the US dollar and ensure the United States' leadership and influence on the global financial stage.
In addition, the WLFI team provided few actual details about the project itself, emphasizing only usability. In response, Fox Business reporter Eleanor Terrett posted on the X platform that she got most of the feedback from the community audience (Trump had previously conducted X Space) because no substantive information about the platform and its actual use was disclosed, and the results showed that the community was disappointed with the Trump family's DeFi project World Liberty Financial.
More than 60% of WLFI tokens will be sold under SEC regulation
WLFI will launch a governance token, $WLFI, which will be non-transferable and will not provide additional economic rights, possibly to avoid violating securities laws. In addition, under the strict US crypto regulatory environment, the token sale of $WLFI will be regulated by the US SEC. Only certified qualified investors can purchase $WLFI, and the token sale will be conducted under the SEC's "Regulation D" exemption.
According to the U.S. Securities Act, the issuance and sale of all securities can be compliant in two ways. The first is to register securities with the SEC, and the second is to apply to the SEC for securities registration exemption. The former is the traditional equity listing path, namely IPO, which has high compliance costs and is not suitable for coin issuance projects in the crypto circle. Therefore, for most cryptocurrency projects, the latter registration exemption path is concrete and feasible. Among them, registration exemptions can be obtained based on regulations such as Regulation D, Regulation S, and Regulation A+.
Simply put, WLFI seeks to use the exemption under Regulation D to raise funds from qualified investors or through small private placements without registering securities with the SEC.
At the same time, according to Decrypt, there is no pre-sale, venture capital and early purchase of $WLFI tokens, just like any other DeFi project that can be expected to see, and the distribution of tokens launched now is very fair, most of which will be distributed in the upcoming token sale, and part of the net proceeds of this sale will go into the project's multi-signature wallet treasury reserve.
According to the white paper that was exposed in advance and the team revealed in the live broadcast, about 62.66% of the $WLFI supply will be allocated in the upcoming token sale, followed by 17.33% reserved as user rewards and community development, and the remaining 20% will be allocated to the team, consultants and future employees. The undisclosed $WLFI portion will be allocated to the WLF Foundation, affiliates of the Trump Group, and the Witkoff Group. The team also revealed that the sale of $WLFI and all buyers of $WLFI will be screened according to the same KYC standards as US cryptocurrency exchanges such as Coinbase and Kraken.
Although $WLFI has not yet been launched, many related tokens have appeared on the market. In this regard, Eric Trump also warned the public to be vigilant against fake tokens claiming to be Trump projects. The only official project will be announced directly by the official. "Please don't be fooled, please look forward to the appearance of the real token."
