After the debut surge, WLFI fell back, and the crypto world contributed 5 billion dollars to the Trump family.

Author: Ye Zhen, Wall Street Journal

The cryptocurrency project World Liberty Financial, associated with the Trump family, made its market debut. Although its core token WLFI experienced a brief surge before quickly falling back, underperforming expectations, this did not affect the Trump family's ability to secure substantial profits.

On Monday (September 1), the highly anticipated WLFI token was officially listed for trading on major cryptocurrency exchanges such as Binance, Bybit, and OKX. The token opened at a price of 20 cents and quickly surged to a high of around 40 cents within five minutes of opening, but then the increase significantly narrowed. As of now, its price has fallen back to around 23 cents, performing below expectations.

According to the rules, approximately 35,000 early buyers who purchased tokens for a total price of about $550 million before this spring are allowed to sell 20% of their holdings on Monday. Since their purchase cost is much lower than the opening price, many chose to take profits immediately.

However, the performance of the token's secondary market did not affect the Trump family's earnings. The New York Times reported that disclosed documents show an “unusual internal arrangement” with the Nasdaq-listed company Alt5 Sigma Corporation, which could bring direct cash benefits to the Trump family entities of up to hundreds of millions of dollars. In short, the Trump family makes money through special agreements, not through the rise and fall of tokens. The publicly traded company Alt5 spent $1.5 billion to buy WLFI, with 75% of the sales proceeds going straight into the Trump family's pockets, instantly locking in hundreds of millions in cash.

In addition, based on Monday's closing price, the 22.5 billion $WLFI tokens controlled by the Trump family have an estimated value of about $5 billion, making it one of Trump's most valuable assets, far exceeding traditional real estate investments such as his hotels and golf courses. However, the tokens held by the management team are currently still in a locked state and cannot be sold immediately.

Special Internal Arrangement Locks in Huge Gains for the Trump Family

According to the New York Times, despite a lackluster market debut, the Trump family's massive profits have been secured through another channel. This is attributed to an unusual agreement reached with the NASDAQ-listed company Alt5 Sigma Corporation, as disclosed by World Liberty.

In August this year, Alt5 announced the appointment of Zach Witkoff, co-founder of World Liberty Financial, as its chairman, with President Trump's son Eric Trump becoming a board member, and another executive, Zachary Folkman, serving as a board observer. This series of appointments has placed three senior executives from World Liberty in leadership positions at Alt5.

At the same time as announcing changes in its leadership, Alt5 also disclosed its plan to use the $1.5 billion it has raised to make purchases when WLFI starts trading on Monday. On Monday, World Liberty confirmed in a statement that it had sold over 7.5 billion tokens (approximately 8% of the total supply) to Alt5. This transaction was the largest token trade in the market that day.

According to the agreement established at the inception of the project, in return for the endorsement of Trump himself and the family's involvement in management, a Trump family entity named DT Marks DEFI is entitled to receive “75% of the net proceeds from the $WLFI token sale”. This transaction sold to Alt5 is expected to bring the Trump family cash earnings worth hundreds of millions of dollars.

Conflicts of Interest Disputes and Market Reactions

The close corporate ties between Alt5 and World Liberty have raised external scrutiny over potential conflicts of interest.

John Reed Stark, a lawyer who served at the SEC for twenty years, stated that what is most surprising about this series of business operations is the Trump family's openness in their efforts to make money.

“There is a clear conflict of interest with the role of the president,” Stark said, “but it is worth noting: everything they do is out in the open. In the past, such associations would have been hidden, but now the presidential family showcases them like celebrating a medal of honor.”

Eric Trump, the son of Donald Trump, and Donald Trump Jr. both celebrated the listing of WLFI on social media on Monday. Eric Trump is currently visiting Japan, having previously attended two cryptocurrency-related events in Hong Kong to promote the company's products.

Meanwhile, according to several industry news agencies, the relationship between the project and Alt5 may be under review by the U.S. Securities and Exchange Commission (SEC), but Alt5 has denied these reports. As of Monday, Eric Trump and World Liberty have not responded to media requests for comments.

On-paper wealth reaches $5 billion, but liquidity is restricted

With the launch of WLFI trading, the Trump family's cryptocurrency wealth has achieved a significant leap on paper. As of Monday afternoon, the 2.25 billion WLFI tokens they control are worth approximately $5 billion.

In addition, the holdings of the partners are also quite valuable. The Witkoff family and other investors including Chase Herro and Zachary Folkman control 3.75 billion tokens, which, based on Monday's closing price, have a total value of approximately $1.7 billion.

However, this wealth currently exists only on paper. World Liberty announced on Monday that the tokens held by the management team, including the Trump family, the Witkoff family, and other partners, are still in a locked state and cannot be sold on the public market.