Donald Trump bets on World Liberty Financial, experts say it’s a red flag

Donald Trump and his sons are generating buzz around the upcoming launch of their new cryptocurrency project, World Liberty Financial, which aims to revolutionize banking by moving away from “slow and outdated” traditional banks.

Set to debut on Monday, September 16, the project is anticipated to resonate with Polymarket participants, who have speculated that Trump would introduce a coin ahead of the November elections. This launch represents a significant step for the Trump family in the evolving landscape of cryptocurrency, positioning themselves as proponents of a more efficient financial system.

In a recent post on X, Trump announced that he is “embracing the future with crypto” and will host a “Twitter Spaces” event at 8 p.m. EST to celebrate the official launch of World LibertyFi.

Some crypto analysts are optimistic, with at least one predicting that the World LibertyFi token could see a “10x” increase in value within the next two weeks. However, a Bloomberg report has raised concerns, highlighting several significant red flags associated with the project.

It’s For Trump, Insiders

First and foremost, the leadership of World Liberty Financial raises eyebrows, as Chase Herro, known for his previous involvement in other crypto ventures, is at the helm. His last project, Dough Financial, aimed to be a lending platform similar to AAVE but faced a major setback when it suffered an exploit that drained over $2 million, leaving it with just $10,863 in total value locked and seemingly inactive.

Another significant red flag is the allocation of 70% of World Liberty Financial’s tokens to insiders, including Trump himself. While it’s not uncommon for crypto projects to allocate a portion of tokens to insiders, a 70% stake is substantial and raises concerns about potential price volatility if these insiders decide to sell.

The project may also encounter regulatory challenges, particularly with the SEC, which views such tokens as securities. This classification requires that token buyers receive comprehensive information about the project and its founders, which could complicate the launch.

Additionally, the lending sector is becoming increasingly crowded, with established players like AAVE and newer entrants like Morpho and LayerBank all vying for market share. Many of these projects have struggled to gain traction, raising questions about how World Liberty Financial plans to differentiate itself.

The timing of Trump’s promotional efforts has sparked criticism, especially with only 50 days left until the election. His focus on this venture comes alongside other unconventional merchandise, including signed sneakers and Trump-branded Bibles, which have drawn mixed reactions from the public.

Trump’s financial landscape is complex; while he reportedly holds a crypto portfolio valued at over $5.7 million, his media company’s stock has plummeted nearly 80% since its peak earlier this year. Moreover, Trump has faced significant legal and financial challenges, including a hefty $464 million fine from a civil case.

Whether this crypto project serves to bolster his campaign funds or address legal expenses remains to be seen, but the venture certainly intertwines his business pursuits with his political ambitions.