Eric Trump has been removed from a planned board seat at fintech firm Alt5 Sigma, which manages a $1.5 billion World Liberty Financial treasury. Alt5 Sigma revealed the change just weeks after announcing a fundraising deal with World Liberty Financial, the crypto platform co-founded by Donald Trump and his sons.
Eric Trump Downgraded To Board Observer After Nasdaq Compliance Review
According to a Forbes report, the company disclosed this in a Securities and Exchange Commission filing. Trump, initially announced as a director, would instead serve only as a board observer after consulting with Nasdaq.
The firm had said Eric Trump would join its board as part of the agreement, while fellow co-founder Zak Folkman would be a board observer. That plan has now been reversed, with Folkman now expected to take a directorship subject to shareholder approval.
The SEC filing stated the adjustment came after discussions with Nasdaq to comply with its listing rules. The document did not explain why Trump’s directorship was blocked or which rule applied. Legal experts who reviewed the disclosure could not identify a clear basis for Nasdaq’s intervention. Earlier, Alt5 Sigma boosted Trump’s WLFI treasury strategy with a $1.5 billion offering.
World Liberty Financial launched in September 2024 as a decentralized finance venture “inspired by the vision of Donald J. Trump.” The tokens reached $0.2092 by early September, more than quadrupling early investments, though still down from its peak price. It issued $WLFI tokens priced as low as $0.015. The tokens do not represent equity but give holders voting rights on rule changes.
Alt5 Sigma Legal and Governance Challenges Emerge Amid WLFI Price Surge
Alt5 Sigma holds 7.3 billion $WLFI tokens purchased at $0.18 each, now worth roughly $1.5 billion. That stake has appreciated by more than $200 million in less than a month. A Trump-linked LLC controls about 38% of World Liberty Financial, owns 22.5 billion tokens, and is entitled to about 75% of token sale proceeds. This position was built during WLFI September 1 launch following a $2.26 billion raise.
Despite the SEC filing, Alt5 Sigma’s website continued to list Eric Trump as a director on its leadership and investor relations pages. The company, World Liberty Financial, and Eric Trump did not respond to inquiries. Nasdaq also declined to comment.
The filing also revealed other complications. A Rwandan court recently dissolved Alt5 Sigma’s Canadian subsidiary, sentencing former principal Andre Beauchesne for illicit enrichment and ordering the seizure of $3.5 million. Alt5 Sigma said its board only became aware of the ruling in late August.
Additionally, the company disclosed litigation tied to its former CFO, Virland Johnson. U.S. trustees claim Johnson failed to disclose restricted stock units during bankruptcy, and they are seeking to recover 330,000 shares. However, Alt5 Sigma has disputed the allegations.
Paul
Paul Adedoyin is a crypto journalist with 4+ years experience who provides timely news, in-depth research, and insightful content to inform and empower his audience. His works have been featured on sites such as CryptoMode, CryptoNewsFlash among others.
He holds a degree in Geophysics from OAU, Nigeria. When he’s not writing, he loves watching soccer and reading educative journals.
He can be reached via [email protected]
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.
Source: https://coingape.com/eric-trump-removed-from-wlfi-treasury-firm-alt5-sigmas-board/