Original title: Trump’s new crypto project opens access to $540m cash cow
Original author: Tim Craig
Original source: https://www.dlnews.com
Compiled by: Mars Finance, Daisy
Trump's World Liberty Financial may have raised $540 million for insiders.
Code testing showed that the project planned to raise funds through a token sale at a valuation of $1.8 billion.
It is unclear whether the token sale would attract the attention of regulators.
World Liberty Financial, an upcoming decentralized finance (DeFi) application with ties to Trump family members, could provide the former president with hundreds of millions of dollars in funding through a token sale.
A test of the code, identified by user X Dumpster DAO, showed that the project planned to sell 30% of its WFLI token supply at a valuation of $1.8 billion to raise funds.
The project's white paper notes that while the platform is not owned, managed, operated or sold by former President Donald Trump, he and other family members may still receive compensation from it.
If all 3 billion tokens sold find buyers, the project will raise $537 million.
The amount is notable because Trump still owes New York State $454 million in fines stemming from his business fraud lawsuit.
The information in the test code matches a draft of the World Liberty Financial white paper first reported by CoinDesk, which said insiders would receive 70% of WLFI tokens and the remaining 30% would be sold to the public.
At a $1.8 billion valuation, beneficiaries of the project, including members of the Trump family, would own nearly $1.3 billion worth of tokens.
The large allocation of tokens to insiders, among other issues, has sparked mixed opinions.
World Liberty Financial says its mission is to “make cryptocurrencies and America great by driving mass adoption of stablecoins and decentralized finance.”
But on-chain investigators were quick to point out that the project was linked to Dough Finance, a previous DeFi protocol that was hacked for $2.1 million in July.
World Liberty Financial assured potential investors on Telegram, a messaging app:
“We are not taking any risks,” the project said. “Our code has been thoroughly reviewed.”
Still, many remain skeptical.
For example, Nic Carter, founding partner of Castle Island Ventures, said the project was "an unnecessary distraction at best" and could cause embarrassment and legal trouble for Trump.
Find the test code
World Liberty Financial's relationship with Dough Finance was key in identifying the code test.
Blockchain generates a vast amount of data, making it difficult to identify specific activity unless users know where to look.
Dumpster DAO found its way to a clue by linking World Liberty Financial to DeFi protocol Dough Finance through a former team member, Chase Hero, who was tagged in social media posts related to World Liberty Financial.
CoinDesk later reported that four of the members listed in the World Liberty Financial white paper had previously worked at Dough Finance.
Dumpster DAO checked Dough Finance’s token deployer — an address on the Polygon blockchain — and found test contracts labeled WLFinancial and WLFiPresale.
The contracts show plans to sell 30% of the WLFI token supply at six price ranges, starting at $0.0075 per token and going as high as $0.03, raising a total of $537 million.
The test code stipulates that WLFI tokens will not be tradable initially, but the project reserves the option to upgrade WLFI to make it tradable in the future.
It is unclear whether World Liberty Financial’s launch of a non-tradable token will attract the attention of regulators.
The SEC has previously said it considers similar token sales, known in the industry as initial coin offerings, to be securities offerings.
A spokesman for World Liberty Financial declined to comment.