Trump-Backed DeFi Project Accused of Illegal Token Sales and Preferential Deals

World Liberty Financial, a decentralized finance (DeFi) project backed by the Trump family, has been accused of illegal token sales and preferential deals with investors. The project, which aims to allow crypto holders to earn interest through various DeFi protocols and borrow against their assets, has denied the allegations.

In a recent statement, World Liberty Financial clarified that it has not sold any WLFI tokens and that its recent acquisitions of other blockchain project tokens were part of routine treasury management. The project's current crypto holdings, valued at $373 million, include major stakes in Ether and Wrapped Bitcoin.

However, the project has been accused of swapping tokens against other assets, which some have linked to illegal activities. World Liberty Financial has denied these allegations, stating that its actions are part of routine treasury management. Nevertheless, reports suggest that the project has swapped around $10 million worth of tokens against other blockchain asset tokens, charging a flat 10% fee for the transaction.

Amidst these allegations, World Liberty Financial has faced criticism from various quarters. Trump's former White House communications director, Anthony Scaramucci, has described the project as a "scammy grift that threatens to undermine" the legitimate cryptocurrency industry. Billionaire investor Mark Cuban has also criticized the project, calling its launch an act of "desperation" by Trump and finding nothing "innovative or valuable" about it.

The project has also been accused of giving preferential treatment to certain investors, particularly those who brought more than $15 million to the table. Some investors have claimed that they had friendly terms with the advisors of the project and wanted to be associated with decentralizing finance. However, these claims have not been independently verified.

World Liberty Financial has generalized token trading, with around 24 billion WLFI tokens priced at $0.05 each. The allegations against the project began to surface around 15 days after it cracked the sales of around 1/5 of the $100 billion token supply, earning it $254 million. The project plans to finish its planned launch within Q3, 2025, but must first address the controversy surrounding its alleged illegal activities and preferential deals.