Step Right Up, Suckers, Trump's Got A Crypto-Something!

Sounds very legit!

From the family who brought you Trump steaks, Trump University, Trump Media & Technology, and some bankrupt casinos, here comes a new grift, it is crypto something! You’ve heard of venture capital, but this is adventure capital, as in your money is going to go on an adventure, and who knows if it’ll ever come back?

The “venture” is called World Liberty Financial, and it’s maybe a platform, maybe an app? Maybe a borrowing and lending platform? Trump isn’t sure, but there are digital “voting” shares of it called $WLFI. Sounds a little conflict-of-interest-y for a guy who hopes to be president and appoint commissioners to the Securities and Exchange Commission, but never mind that part. How dodgy is it? Dodgier than Dogecoin, let us count the ways! 

First of all, the platform is similar to a blockchain app built by Trump’s new business partners, called Dough Finance. This July, that app was hacked, and $2.1 million got extracted. Did the partners fix the vulnerabilities before they slapped a Trump brand on it? Place your bet and see!

Then there’s the business partners, hoo boy! One of them is Barron Trump, age 18, experience zero, who is listed as the project's “DeFi visionary,” which is short for “Decentralized Finance,” which is short for “nobody can track down your money if you lose it.” Barron was supposed to show up for the launch of this enterprise last night, for his first major speaking role, but he had the vision to simply not show up. 

The other partners are Trump’s uglier sons, who are listed in the company’s white paper as “Web3 Ambassadors,” and two guys, Zachary Folkman and Chase Herro, who are listed as World Liberty Financial’s head of operations and its data and strategies lead, respectively. They were introduced to Trump by Steve Witkoff, a real estate investor pal of his who happened to be golfing with Trump on Sunday when that crazy guy was crouching in the bushes with a gun.

Zachary Folkman’s experience includes having registered a company called Date Hotter Girls LLC, which posted seminars on YouTube on how to pick up women, “Date Hotter Girls: Better, Faster & Easier.” 

Chase Herro (which he spells “Hero” on his video channel), calls himself “the dirtbag of the Internet,” and has spent time in prison for dealing weed. He’s called Bitcoin a scam and said that regulators should “kick shitheads like me out,” and appeared at paid seminars with Jordan Belfort, that penny-stock scammer who was played by Leonardo DiCaprio in The Wolf of Wall Street. Hero/Herro has a YouTube channel where he drives around and screams stuff like “You can literally sell shit in a can, wrapped in piss, covered in human skin, for a billion dollars if the story’s right, because people will buy it!” (At the 17:41 mark, there.)

Twenty percent of the tokens will be allotted to the founding team, while 17 percent of the tokens will be set aside for “user rewards” and the remaining 63 percent of the coins will be sold to the general public. What do you get for that, general public? The tokens are non-transferable and will not earn any yield, which seems to be the entire point of crypto, other than trying to hide your money from the government. But what do we know? You get “voting shares,” and what are you voting on? Who knows! Also the tokens will be offered under the SEC’s Regulation D, which is apparently short for “dirty.” Under Regulation D the security doesn’t have to be registered with the SEC.

From the SEC’s page explaining Regulation D investments: “Red flags. Fraudsters may use unregistered offerings to conduct investment scams. […] It may be difficult or impossible to recover the money you invest in an offering that turns out to be fraudulent.”

Regulation D investments are only supposed to be sold to accredited investors with certain investment credentials and enough net worth to lose several hundred thousand shirts. So not the general public. Yet the venture is being plugged as a way to help the poors. Reported the Verge:

Donald Trump Jr. and real estate developer and landlord Steve Witkoff, both of whom are also involved in World Liberty Financial, framed the project as a way of helping underserved and unbanked communities.

“If you want to borrow money today, you have to be almost anointed. You have to be a member of the privileged class,” said Witkoff, who in 2017 purchased the Fontainebleau Las Vegas for $600 million.

The SEC is so mean, how dare they try to keep poor people from getting ripped off?! And how does this work, it’s okay to sell these tokens on an exchange because it’s a “voting share” but not an “investment,” or something? Our economics degree is garbage and we want a refund.

When asked for details of this venture on Monday, Trump couldn’t explain them either. He just immediately changed the subject: “It’s crypto, it’s AI, it’s some of the other things, you know, AI, speaking of an interesting future, it needs tremendous energy capability, beyond anything I’ve ever heard…” Crypto and AI are two different things, hopefully needless to say. 

“Barron knows so much about this," said Trump. "Barron is a young guy. He's got four wallets or something. I'm saying 'explain this to me.' He knows it so well. And Eric and Don. I have a lot of respect for them.” 

Too bad Barron wasn’t there!

A disclaimer in the company’s white paper says that World Liberty is “not owned, managed, operated or sold” by the Trumps. It does note, however, that they may receive compensation. Oh, no shit?

[Financial Post archive link/ NYT gift link]