Trump hawks new cryptocurrency venture despite once calling business a ‘scam’ – but details are thin

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White House Correspondent

Donald Trump and his family appeared in a live broadcast on Monday evening to unveil a hotly-anticipated new cryptocurrency venture – but revealed almost nothing about what it will actually entail.

In an interview with crypto news podcast Rug Radio on Monday evening, the former president and convicted felon hawked his new “World Liberty Financial” (WLF) project, which has previously been billed as involving “digital real estate.”

His eldest son Donald Jr described it as “the start of a financial revolution”, while his younger brother Eric said it would challenge the power of big traditional banks by making crypto accessible to ordinary Americans.

Yet for all the fanfare, neither they nor their business partners revealed almost anything concrete about the project, save that it will involve a “stablecoin” – that is, a digital currency whose value is pegged to that of an existing traditional currency – and be controlled via non-transferrable “governance tokens”.

Nor did Trump’s youngest son Barron, 18, who has been described as the project’s “visionary,” ever make an appearance, despite excited promises from his brothers and from the host, Farokh Sarmad.

Experts described the elder Trump’s decision to promote his sons’ crypto business even while seeking an office that would give him the power to regulate the crypto industry as a serious potential conflict of interest, adding to his long history of mingling official power with his personal business interests.

“[Biden and Harris] have been very hostile to crypto, extremely hostile, like nobody can believe,” said Trump, who as recently as 2021 called Bitcoin a “scam” and “a disaster waiting to happen” but was listed in a leaked document WLF’s “chief crypto advocate.”

“My attitude is different… [crypto] suffers from some credibility lapses; some things were done or not done. But it’s very young, and very growing, and if we don’t do it, China’s gonna do it. If we don’t do it, other countries are gonna do it.”

He credited his sons, and especially Barron, “more than anything else” for opening his eyes to the potential of crypto, as well as his successful sale of blockchain-based collectibles (known as NFTs), earning a reported $7m in royalties.

“Barron knows so much about this,” he said. “Barron’s a young guy, but he knows – he talks about his [crypto] wallet, he’s got four wallets or something, and I’ll say ‘what is a wallet?’ But he knows it inside out.

“It’s almost like younger people know it a lot better than older people. But I have a lot of respect for them. They’ve shown great judgement, all of them.”

Since his comments in 2021, Trump has warmed to the cryptocurrency industry. He has bought at least $1m in crypto, and last month declared that he wants to make the USA “the crypto capital of the planet.”

The Trumps and their business partners refrained from going into detail about World Liberty Financial itself until more than an hour into the interview, and even now its actual nature remains somewhat mysterious.

One businessman involved in the project said on the call that it would involve a stablecoin pegged to the US dollar, with the goal of reinforcing the dollar’s status as a global reserve currency while creating new investment opportunities for common folk.

Yet descriptions by Eric Trump, Don Jr, and others, as well as reporting by the crypto news outlet CoinDesk, suggested that it will be a blockchain-based banking, lending, and money transfer platform designed to make cryptocurrency more accessible and easy to use while bypassing “censorship” and political control.

On Monday’s call, backers said it would initially focus on stable and secure assets rather than speculating on the price of volatile currencies such as Bitcoin and Ethereum.

Zachary Folkman, a crypto entrepreneur who is working with the Trumps, said that the project will be controlled by a blockchain-powered governance token, akin to a share in a corporation, which will confer voting rights but no economic rights such as dividends or profits.

These voting rights will be capped at 5 per cent per owner, Folkman explained, with 63 per cent of them reserved for sale to the general public while 17 per cent are earmarked for user rewards and 20 per cent for compensating WLF staff and advisers.

Crucially, he added that there “have been no pre-sales, there have been no [investor] early buy-ins with discounted allocation, despite any sort of speculation out there.” In other words, everyone will get the same chance to buy in.

A leaked early draft of the project obtained by CoinDesk had proposed concentrating 70 per cent of these governance tokens in the hands of its founders and employees.

The draft listed Eric and Don Jr as “Web3 ambassadors,” referring to the purported next version of the internet that advocates believe crypto and other “decentralised finance” (DeFi) technologies will bring about.

However, due to ongoing “regulatory uncertainty” over whether such tokens count as “securities” under US financial law, Folkman said they would only be available to investors accredited by the Securities and Exchange Commission (SEC), which generally means someone with lots of money or some expert knowledge.

Danielle Brian of the non-profit Project on Government Oversight told The New York Times that Donald Trump’s involvement in WLF would create serious conflicts of interest if he wins election this November. Trump biographer Tim O’Brien similarly called it “a conflict of interest in motion.”

Not all crypto advocates are on board with the project. Earlier this month pro-Trump crypto entrepreneur Nic Carter described it as “a huge mistake” which could “genuinely damage Trump’s electoral prospects, especially if it gets hacked.”