Yesterday, Donald Trump presented on X his new crypto project based on the WLFI token.

Join me live from Mar-A-Lago at 8:00PM Eastern, tonight on X Spaces. Set a reminder and be sure to tune in! https://t.co/MXTu3hxVFP

— Donald J. Trump (@realDonaldTrump) September 16, 2024

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The project is called World Liberty Financial, and it also involves Donald Trump Jr and Eric Trump. 

Among other things, it also includes the launch of its own governance token, WLFI, of which 63% will be put up for sale, while 20% will be allocated to the team. The remaining 17% will be distributed later as rewards for users.

WLFI: Donald Trump announces his new crypto

WLFI will be a token on Ethereum that will act as the governance token of the crypto project World Liberty Financial.

It is not yet clear, however, when it will be released on the market, nor what its value will be. 

Unfortunately, in the crypto markets, there are already some fake WLFI tokens, so it is necessary to be very careful not to fall victim to the usual scams.

For now, in fact, it will be sold only to accredited investors based on the SEC’s Regulation D exemption, which allows companies to raise capital from accredited investors, or with small private offerings, without registering security with the agency. For this reason, initially, it will not be transferable.

This will help avoid the usual accusations from the Securities and Exchange Commission regarding the offering of unregistered security on the free market. 

It does not yet seem clear whether the objective of World Liberty Financial is to register the WLFI token with the SEC as a security, or to wait for a change of course from the agency to put it on the crypto market as it is. 

The SEC and the fight against crypto 

Since the democrat Joe Biden became president of the USA, in January 2021, and appointed Gary Gensler to lead the SEC, the agency has started to adopt a very strict approach towards criptovalute.

In particular, he accused almost all altcoins, Bitcoin excluded, of being unregistered securities.

The point contested by the SEC is that cryptocurrencies issued directly, or indirectly, by centralized entities should be considered investment contracts if they promise gains. 

Bitcoin for example is not issued by centralized entities, and does not promise profits, but in many other cases things are different. 

The fact is that in the USA, as in many other jurisdictions, it is illegal to offer investment contracts on the market if the offer has not been previously registered, and therefore approved, by the SEC. 

The agency, however, cannot autonomously decide what should be considered a security, and what should not, so much so that in some cases the matter has already gone to court, where judges have ruled, for example, that Ethereum and XRP cannot be considered investment contracts if offered on the secondary market (i.e., on exchanges).

If Donald Trump were to win the elections in November, Gensler would certainly be replaced with a Republican close to the new President, and this could definitively close the issue, in favor of crypto.

In light of this, it may be necessary to wait for the outcome of the November 5 elections to understand how World Liberty Financial intends to proceed with the issuance of the WLFI token on the free market. 

The fundraising

At this point, one wonders why they are already proceeding with private sales of the token to accredited investors thanks to the Regulation D exemption. 

The objective could simply be to raise funds for the current electoral campaign. 

Trump over the years has already sold many NFTs on the crypto markets, so much so that on his crypto wallet there are more than 3 million dollars, mostly in Ethereum. 

These three million, however, are little compared to the over 200 million dollars already raised in other ways by Trump’s campaign. 

It is therefore possible to imagine that from the private sale of the WLFI token they expect to raise well over three million dollars. 

Donald Trump: World Liberty Financial and the role of the crypto WLFI

During yesterday’s presentation event, some information was also given about the crypto project World Liberty Financial, but with few concrete details. 

Trump spoke instead mainly about the crypto sector as a whole, the hostile attitude of the SEC towards it, and the fact that he would like the USA to become the main crypto hub of the world. 

The World Liberty Financial platform should be a kind of app to make loans on Aave more accessible to ordinary people. The project has reportedly been in development for almost nine months. 

From previously disclosed information, it appears that it should be a fork of Aave, based on a stablecoin and primarily active in DeFi. 

In reality, those who were able to examine the protocol code found it similar to that of Dough Finance, a small DeFi project created specifically to automate loans on Aave. However, Dough Finance suffered a 2 million dollar hack in July. 

In fact, yesterday, the head of operations at World Liberty Financial, Zachary Folkman, briefly described the platform in a way similar to that of Dough Finance.

At this moment it seems not only that the WLFI token is not ready to land on the open market soon, but also that the World Liberty Financial platform is not ready to start operations either. 

Last night a real presentation was expected, but instead it was just a meeting where it was talked about vaguely.