President Donald Trump’s new cryptocurrency venture, World Liberty Financial, is aiming to raise $300 million through the sale of cryptocurrency tokens, but it has drawn criticism from industry experts.
The project, promoted by President Trump and his three sons, Donald Jr., Eric and Barron, will “leverage the global reach and visibility of the Trump brand” to popularize cryptocurrencies, according to the official website. The aim is to promote the
World Liberty Financial (WLF)’s website went live on Tuesday, but technical issues halted the launch. The company’s website reportedly crashed due to excessive traffic shortly after its launch.
Sandy Peng, co-founder of tech research firm Scroll and advisor to WLF, told the website CoinDesk that the outage occurred because the website received 72 million unique visits in the first hour. Ta.
However, blockchain data tracked by analytics platform Etherscan showed that by Tuesday afternoon, just over 5,000 unique wallet addresses were holding the company’s WLFI token.
The venture has drawn criticism from crypto and decentralized finance (DeFi) industry experts who are concerned about potential conflicts of interest, opaque investor protections, and are wary of damaging the industry’s already tarnished reputation. exposed to
“There is a litany of undesirables in the world of cryptocurrencies and DeFi, and adding Trump to the list is unlikely to make it any more popular or enthusiastic.Remember, these markets were originally The crypto market started out by promoting drugs and human trafficking,” Michael Dowling, a finance professor at City University Business School, told Barron’s.
On September 18, 2024, Republican presidential candidate Donald Trump visits a crypto-themed bar called Pubky in New York’s West Village. His new cryptocurrency venture has been criticized by industry experts. On September 18, 2024, Republican presidential candidate Donald Trump visits a crypto-themed bar called Pubky in New York’s West Village. His new cryptocurrency venture has been criticized by industry experts. Spencer Pratt/Getty Images
Investors looking for hot new cryptocurrencies may be wary, Dowling said. “Trump’s ‘new technology’ business investments tend to be very expensive for investors,” he said. “The $10,000 you invested in shares of his affiliated Truth Social company three years ago is now worth $10,000. It will be worth less than $3,000.”
“His historical costs would be a very painful reminder for potential investors. Admittedly, his overall investment history is less than exemplary. That said, many of his views are That would overlap with the liberal views of investors,” Dowling added.
“More specifically, J.D. Vance is associated with the liberal side of the US technology industry, so he finds a more natural market of enthusiasm in the world of cryptocurrencies than in the world of stocks. That said, it’s a surprisingly strange idea for a candidate for US President to effectively have his own private currency (even if that currency controls transactions on DeFi platforms). even if it’s just for the sake of it). ”
Nick Carter, general partner at venture capital firm Castle Island Ventures, expressed doubts about the project’s intent. “He has said good things about cryptocurrencies, but he wants to extract value quickly. None of this is liberalizing or democratizing access to finance,” Carter told the Financial Times. he said.
However, Dowling said that crypto investors today mainly view the crypto market as a way to make money. “So while Nick Carter’s moral view may be a valid one, it is unlikely to sway investors,” he added.
WLF has brought in cryptocurrency experts to provide advice and guidance on this venture. It currently consists of eight advisors from the industry, including Peng and Alex Dulub, a blockchain expert and founder and CEO of software development company PixelPlex.
“At PixelPlex, we provided our blockchain development and security expertise to World Liberty, advising them on best practices and innovative solutions,” Darrab told Newsweek.
“Currently, through Web3 Antivirus, we are actively defending against phishing attacks to keep our community safe. “We detected the website,” the related tweet continued at 11:17 a.m. “And within an hour, the website was taken down and is now inaccessible.”
According to technology website The Verge, only 2% of the 20 billion WLFI tokens available for public sale were purchased in the first few hours, raising about $12 million. As of 10:30 a.m. Thursday, 856 million tokens or 4.32 percent had been sold.
Mr Dowling said it was a “decent launch”. “Typically, the total number of coins actually sold in the first sale is small. The expectation is that the price will skyrocket and the majority of coins will be sold at higher prices. ” he added.
On the day of the release, President Trump posted on X (formerly Twitter), “Today is the day! The @WorldLibertyFi token sale is underway. Get your $WLFI tokens now.” In response, a community note from an X user said: “The fine print states that the ‘tokens’ are non-transferable and are locked to your wallet, so they cannot be withdrawn until this ‘scheme’ is deemed fit to allow it.Read more ” small letters! ”
WLF’s token structure provides voting rights but not economic rights. It is also not available to anyone in the United States unless they are a registered investor.
“In some ways, World Liberty is similar to old-style cryptocurrencies, which you might expect from a 78-year-old first-time crypto enthusiast,” Dowling told Newsweek. spoke.
“Increasingly, tokens offer economic participation rights, which were largely absent from early coins, but are still far from universal. Rights tend to be trivial compared to the value of the token, which increases in price. However, it does suggest that the coin is intended as a speculative product rather than an investment product,” he added.
The WLF may appear to be a U-turn for Republican presidential candidates. President Trump has been outspoken in expressing his negative views on digital currencies. “I don’t like Bitcoin or other cryptocurrencies. They are not money and their value is highly volatile and based on thin air,” Trump posted on X. In 2019.
“The United States has only one real currency, but it is stronger than ever, both in reliability and credibility. It is by far the dominant currency anywhere in the world, and it is It will always remain so. It is called the US dollar! ” he added.
However, the former president is bullish about cryptocurrencies in 2024, using Bitcoin to pay for dinner after a rally in New York in September, and at the time said, “I just made (my) first transaction with Bitcoin.” ” he said.
“Crypto enthusiasts, what I call crypto enthusiasts, go out and vote because if you vote, we won’t lose,” Trump added.
In July, he attended the annual Bitcoin conference in Nashville, Tennessee, and likened the crypto sector to the steel industry at its peak, noting that the United States is “the crypto capital of the planet and the world’s Bitcoin superpower.” We want to become a superpower,” he told attendees. ”
Mr Dowling warned that some inexperienced investors could put themselves at risk. He said, “As more Trump supporters begin to participate in the crypto rush, given the general demographics of those voters, they will likely be much more likely to be scammed and scammed. “These markets are really complex, and there are many layers of choices and decisions.” This leaves people vulnerable to exploitation. ”
