In Trump-Backed Crypto Project, Insiders Are Poised for Unusually Big Token Payouts

The team behind World Liberty Financial is poised to receive an astonishing 70% allocation of the project’s WLFI tokens, a figure that significantly surpasses typical distributions for projects claiming to address the inequities of the traditional finance system.

According to a draft white paper obtained by Pinetbox, a staggering 70% of WLFI tokens will be reserved for insiders, including the project’s founders, team members, and service providers. This leaves only 30% of the tokens available for public sale, with a portion of those proceeds also earmarked for the founding team.

When questioned about the appropriateness of such a high allocation to insiders, one advisor quipped, “LMAO. Nice joke, ser.”

World Liberty Financial, which is being promoted by former President Donald Trump and his sons, positions itself as a solution to the “rigged” finance system and aims to “put the power of finance back in the hands of the people.” The draft white paper reveals that the majority of WLFI, the governance token for the project, will concentrate control among a small group of insiders.

While the remaining 30% is set for public sale, a portion of those funds will also go back to the project’s insiders, although some will be kept in a treasury to support operational costs.

Such a high insider allocation is unusual in the crypto space. For comparison, Ethereum’s Genesis block reserved only 16.6% of its ether for the Ethereum Foundation and early contributors, while the companies behind Cardano retained a mere 20% of ADA at its launch. Satoshi Nakamoto, the pseudonymous creator of Bitcoin, is believed to control just over 5% of Bitcoin’s total supply.

A representative from World Liberty Financial indicated that the project is still finalizing its plans. “The team is working with a lot of contributors, and we’re not quite sure which version [of the white paper] you are referring to at the moment, but they have not finalized their tokenomics yet,” they stated. “All the information we’ve shared so far that is final/approved can be found on WLF’s Twitter (X) and Telegram. Those will be the main channels for any announcements.”

Pinetbox’s earlier report also highlighted the involvement of the Trump family and individuals linked to a recently hacked crypto app in the World Liberty Financial team. The project is set to operate on Aave, a well-known Ethereum-based lending platform.

The allocation structure raises concerns about whether World Liberty Financial is more about capitalizing on the Trump name than genuinely creating a novel decentralized finance platform. Historically, pre-sale proceeds have been reinvested back into projects for growth. If insiders retain most of the funds, it raises questions about how the project will fulfill its ambitious goals.

One of these goals is to establish the U.S. as the “crypto capital of the planet.” In a recent Telegram post, the World Liberty Financial team reassured skeptics that its “plan will speak for itself,” asserting that it is backed by top talent in the crypto sector. “Our mission is crystal clear: Make crypto and America great by driving the mass adoption of stablecoins and decentralized finance,” they declared.

In today’s crypto landscape, public token pre-sales are becoming increasingly rare, largely due to the decline of initial coin offerings (ICOs), which were once the primary means for crypto startups to raise capital. This shift has been prompted by heightened regulatory scrutiny and instances of fraud, leading to the rise of alternative fundraising methods that offer greater oversight and protections for investors.

World Liberty Financial’s approach diverges from traditional ICOs in that its WLFI tokens will be non-transferable, meaning they cannot be traded among users. This restriction likely aims to shield the project from potential securities law violations.

As outlined in the draft white paper, all WLFI tokens will be “non-transferable and locked indefinitely in a wallet or smart contract until such time, if ever, $WLFI are unlocked through protocol governance procedures in a manner that does not contravene applicable law.” Furthermore, the white paper states that purchasers will be screened to exclude individuals sanctioned by the U.S. Treasury’s Office of Foreign Assets Control.

Earlier this week, Pinetbox uncovered connections between World Liberty Financial and Dough Finance, a recently compromised lending application co-founded by Zak Folkman, a former pick-up artist registered as the owner of World Liberty Financial LLC.

While Donald Trump appears eager to gain traction in the blockchain industry through World Liberty Financial, even some of his supporters within the crypto space have expressed caution, suggesting the venture could misfire. “Is there something that we, as crypto Twitter, can collectively do to stop the launch of World Liberty Coin?” asked Nic Carter, a notable figure in the crypto industry and Trump supporter, on X (formerly Twitter).

He remarked, “I genuinely believe this could harm Trump’s electoral prospects, especially if the project faces a hack—it would become the most enticing target in DeFi, particularly since it’s forked from a protocol that has already been compromised. It also stands out as a clear target for the SEC. At best, it serves as an unnecessary distraction; at worst, it could lead to significant embarrassment and additional legal issues. So, are we drafting a petition or what?”

As the project approaches its launch, it has drawn the attention of fraudsters and hackers. Just yesterday, the X accounts of Lara Trump, Eric Trump’s wife, and Tiffany Trump, the former president’s youngest daughter, were hacked and used to promote a crypto scam masquerading as World Liberty Financial.

Donald Trump is designated as the project’s “Chief Crypto Advocate,” while his two eldest sons, Don Jr. and Eric, serve as “Web 3 Ambassadors.” Additionally, Barron Trump, the former president’s 18-year-old son, holds the title of “DeFi Visionary” for World Liberty Financial.

Despite the Trump family’s significant involvement in promoting and establishing the project, the white paper emphasizes a separation from any political affiliations. It states: “World Liberty Financial is not owned, managed, operated, or sold by Donald J. Trump, the Trump Organization, or any of their respective family members, affiliates, or principals. However, they may own $WLFI and receive compensation from World Liberty Financial and its developers. World Liberty Financial and $WLFI are not political and have no affiliation with any political campaign.”