Back in July, there was elation in crypto circles surrounding Donald Trump.
He promised, if elected, to create a national Bitcoin stockpile, back the mining industry, and fire anti-crypto Securities and Exchange Commission Chair Gary Gensler on day one.
But less than a month later, the elation has fizzled. The former president and his sons revealed plans to launch their own crypto project, World Liberty Financial, prompting dread even among loyal supporters.
“Trump went from crypto saviour to mega cringe in the space of a week,” 0xWenMoon, a pseudonymous DeFi investor and contributor to several projects, said on X.
Trump went from crypto savior to mega cringe in the space of a week
— 0xWenMoon 💙🧡 (@0xWenMoon) September 11, 2024
DL News spoke to industry insiders who say the Trumps’ project looks risky, has questionable advisers and contributors, and gives off the appearance of self-dealing.
It comes just as many in crypto crave legitimacy and regulatory clarity, not a political gambit.
What that means for the election is anyone’s guess. Trump has made efforts to win over the crypto industry to leverage what some claim is a large and untapped voter bloc.
But for those in DeFi, World Liberty could erode some of the goodwill Trump has fostered through his pro-crypto posturing.
“I wish he wouldn’t do it,” a crypto investor, founder, and Trump supporter who wished to remain anonymous, told DL News.
“His personal upside is low and the risk to [his] reputation large.”
Is Trump ‘cringe’ now?
A big concern is the team running World Liberty Financial.
It includes Chase Herro, a self-described “dirtbag of the internet.”
“If you do this right, who fucking cares if it goes to zero?” Herro said about crypto in a since-deleted YouTube video promoting his fee-gated trading group.
There’s also Barron — Trump’s youngest son — who is listed as World Liberty Financial’s “DeFi visionary,” in documentation reported by CoinDesk.
It’s not clear what Barron, who has no professional experience building a DeFi protocol, will do in this role.
Trump participated in an X Spaces on September 16 outlining plans for World Liberty Financial to more than 100,000 listeners. He said Barron had four crypto wallets, a sign of his “inside out” knowledge of DeFi. The claim was met with derision from listeners.
The World Liberty team “doesn’t have a good reputation,” the same investor said, adding that those behind WLF have had prior projects fail and remembers that they made little effort to fix them when things went wrong.
Herro, along with his business partner Zach Folkman, were both involved with DeFi protocol Dough Finance, which shut down after suffering a $2.1 million hack. That was only two months ago.
Then, last week, Trump awkwardly paying the bill at a New York crypto bar using Bitcoin only added to the former president’s perceived lack of understanding. (It’s unlikely that any serious Bitcoin backer wants to use the cryptocurrency to buy burgers.)
Some in the Trump family orbit command respect. DeFi players such as pseudonymous security expert Ogle, and Scroll founder Sandy Peng are both involved.
Ogle conceded that the Trumps’ DeFi project might not be the best idea for the former president’s bid for the White House. “It probably is a distraction. I’m not sure if the risks involved with that are necessary,” he said on the Unchained podcast last week.
What’s more, his standing in the community could take a hit. “If this thing goes well, it’s going to negatively impact my reputation, because it’s with someone who’s divisive,” he said.
“If it goes poorly, it’s going to negatively impact my reputation. Just choosing to do it one way or the other is gonna hurt me in some ways, but I think it will help the likelihood of just not hurting a lot of people” through hacks or other security issues.
And to be sure, while many in DeFi are cringing at Trump, those looking to boost Democratic candidate Kamala Harris’ crypto credentials haven’t done any better.
Onlookers winced when the unofficial Crypto4Harris campaign used the phrase “GM frens” in an X post in an attempt to appeal to DeFi fans — the word frens was seen as a corny attempt to parrot DeFi slang.
This profile is absolutely hilarious.
“Gm frens”…. 😂
Meanwhile, today the SEC subpoenaed 3 crypto VC funds. Sorry folks, nothing has changed. https://t.co/hZUWNG2ndW pic.twitter.com/hR0DzLJOr8
— Kevin Thompson 🛡️ (@KPTlaw) August 9, 2024
Pepsi was ridiculed for using the phrase to promote its NFT collection in 2021.
Self-dealing
Another worry: Trump’s foray into DeFi could end up damaging the crypto industry’s image.
“Pro-Trump crypto people are nervous about WLF because they worry, with some justification, that Trump is only out to make money,” Alex Tapscott, a Managing Director of Ninepoint Partners’ Digital Asset Group, told DL News.
And it’s not hard to see why. World Liberty Financial plans to sell 63% of its WLFI token to investors. Earlier code tests showed a mockup for the sale valuing the project at $1.8 billion.
“They used to say ‘What’s good for General Motors is good for America.’ Replace ‘GM’ with ‘Trump’ and you’re not far off from his point of view,” Tapscott said.
The pseudonymous investor also pointed to a self-dealing element in Trump’s move.
“[Trump] launching a token is extremely good for the future regulatory landscape if he wins the presidency,” the investor said.
Still, questionable business partners, a lack of understanding and self-dealing may not matter.
Many support the former president solely on his pro-crypto stance. Tapscott said he doubts many pro-Trump folks in crypto will reassess their position.
“They’ve made their bed and so they’ll have to lie in it,” he said.
Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.