YEREVAN (CoinChapter.com) — Former U.S. President Donald Trump is involved in a new crypto venture called World Liberty Financial (WLFI). The project, which aims to launch a crypto yield product, has attracted attention due to its structure and regulatory questions. Trump, who has expressed support for crypto in recent public statements, is positioned as the “chief crypto advocate” for the project.
WLFI Token Allocation Raises Legal Questions and Investor Concerns
World Liberty Financial plans to sell 30% of its WLFI tokens, while the remaining 70% will be held by the project’s founders, service providers, and other team members. This large allocation to the team is notable compared to other crypto projects.
The white paper also outlines a non-transferability clause. This suggests that investors may not be able to resell their tokens initially. According to Dave Rodman, founder of Rodman Law Group, locking tokens does not exempt them from U.S. securities laws if Americans purchase them.
The breakdown of the 70% token allocation has not been clearly defined. It is unclear whether all team members will receive an equal share.
Governance and Wallet Control Raise Concerns Over Fairness and Transparency
The governance of World Liberty Financial tokens (WLFI) tokens remains uncertain. The project outlines a governance token system, where token holders can propose changes and vote. However, there are concerns about whether this system will ensure fair participation. A group holding a majority of tokens may have the ability to dominate decisions.
There are also questions about who will control the wallets linked to the tokens. Alexandra Damsker, an attorney and consultant, highlighted the lack of information regarding who will manage these wallets. The white paper does not clarify how control will be distributed among the team.
Trump-Backed Crypto Project Faces Security Breach and Regulatory Questions
The project aims to comply with sanctions regulations by screening purchasers. However, no further details on how this screening will work have been provided.
Security has already been an issue for World Liberty Financial. Last week, accounts associated with Lara Trump and Tiffany Trump were hacked, promoting scam addresses. Although Eric Trump confirmed that these addresses were unrelated to WLFI, the incident raised concerns about the security surrounding the project.
The project continues to face regulatory uncertainties, including questions about governance, token distribution, and compliance with securities laws. With Trump at the forefront, the venture has garnered significant attention, but many details remain unclear.
