Both crypto critics and advocates agreed on something this week — the highly-anticipated launch of Republican presidential candidate Donald Trump's crypto project called World Liberty Financial does more harm than good.
“Donald Trump’s sudden enthusiasm for cryptocurrency is as transparent as it is opportunistic," said crypto-friendly Democrat Rep. Wiley Nickel of North Carolina in an emailed statement to The Block. Nickel has backed a number of crypto bills over the past year. "After doing absolutely nothing for crypto while in the White House, he’s only now launching World Liberty Financial to cash in on a movement he never supported."
In an over two-hour live Spaces hosted by crypto personality Farokh on the social media platform X, backers of the project said they planned to launch a non-transferable governance token called WLFI. Previously, the project said it wanted to drive the adoption of stablecoins and said DeFi would be a part of it.
During the spaces, Trump said crypto is "big and yet it’s a fledgling compared to what it will be." Later, Donald Trump Jr., Eric Trump, father-son real estate investors Steve and Zach Witkoff and Dough Finance co-founders Zachary Folkman and Chase Herro all made appearances to tout the venture. The project has also been marred with challenges after both Lara and Tiffany Trump’s X accounts were hacked and posted about a token purportedly associated with World Liberty Financial.
"Everything this man touches is a grift, and his newfound policy stance is no different," Nickel said. "For those of us who have worked to advance crypto innovations through real bipartisan action, Trump’s involvement does nothing but harm serious efforts to build a secure and regulated future for digital assets.”
The X spaces was "lackluster on details," a person in the crypto industry who asked not to be named because of their ties to the Trump campaign told The Block. People in both crypto and political circles didn't really know much about the project or didn't know much about the people involved in the project, they added. Republican lawmakers were in the dark as well on the details involved in Trump's project, they said.
"There is a view in D.C. held by some that there is almost a cult-like following with Trump and some folks on Capitol Hill," they said. "We have not seen any folks, to my knowledge, really jumping to defend this project or to show for it or to promote it or anything."
There are also a "lot more pitfalls than positives" about World Liberty Financial, the source said.
"There's a lot of questions in terms of who's involved here," they said. "A lot of the stories that come out about those involved in the project have been enough to raise red flags for folks here in D.C."
Dr. Tonya Evans, a professor at Penn State Dickinson Law, saw the launch as falling short on details. Evans previously spoke at a Crypto4Harris event in August.
"The Trump family’s launch of WLFI was certainly a high-profile event, but it left a lot to be desired in terms of transparency (the hallmark of best practices in the digital assets community) and, of course, specifics," Evans said in an emailed statement. "While they successfully drew attention to the project and sparked a circus-like curiosity, the lack of clear details about WLFI’s governance token, roadmap, and actual functionality raises far more questions than answers."
During Monday's X spaces, creators of the project said that in light of regulatory uncertainty, WLFI plans to limit participation to accredited investors. That limit "severely undermines the narrative of democratizing finance," Evans said.
"True DeFi is about broad participation, not restricting access to the wealthiest," Evans said. "If WLFI continues on this path, it risks being perceived as another example of political elites using a financial product to benefit a small, privileged group while shutting out the very communities DeFi could empower."
One upside of the project is that it puts "DeFi in the spotlight" and so could bring conversations about innovation and financial inclusion into the mainstream, Evans said.
"Mostly, however, the pros increase donations to the Trump campaign and perhaps garner more support from single-issue bitcoin and crypto voters," said Evans.
Patrick Kirby, policy counsel at the Crypto Council for Innovation, said World Liberty Financial's launch shows "crypto's growing influence."
"I think it's important for policymakers to experiment with technology, with decentralized trading protocols in particular, like we see here, to really better understand the benefits of DeFi and to build kind of that understanding you get through practice and experience," Kirby said in an interview with The Block.
Crypto critic Rep. Sean Casten, D-Ill., criticized World Liberty Financial's distribution structure during a House Financial Services digital asset-focused subcommittee hearing on Wednesday.
The creators announced on Monday that 63% of the WLFI token will be sold to the public, 17% will go toward user rewards, and 20% will be allocated for team compensation.
Casten seemed to allude that if a crypto markets bill led by Republicans were to pass that says that if entities have less than 20% in ownership, it would not be subject to regulation, and that would end up benefitting World Liberty Financial.
Casten also took a swipe at Trump himself.
"I understand why people who have a history of fraud, who have a history of laundering money, would find this very attractive," Casten said.
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