Trump Family–Backed World Liberty Financial Sets Up $1.5 Billion Crypto Treasury
A cohort of investors led by World Liberty Financial is set to purchase 200 million shares in ALT5 Sigma Corporation, a Nasdaq-listed company. The proceeds will be used to build a $1.5 billion WLFI treasury, equating to roughly 7.5 percent of the coin's total supply.
Eric Trump will join the ALT5 board of directors, which will be chaired by fellow World Liberty Financial cofounder Zach Witkoff, son of Steve Witkoff, who was appointed special envoy to the Middle East by US president Donald Trump.
ALT5 is marketed as a crypto payments company. But in practice, the deal will turn the stock into a sort of proxy for the WLFI coin, allowing investors to bet on the asset without the hassle and risk that comes with holding a crypto coin themselves.
'One small step for mankind, one giant leap for WLFI,' wrote World Liberty Financial in an X post.
However, the arrangement has drawn criticism from those who regard it as an example of self-serving Wall Street gymnastics that can lead to losses among unsophisticated investors, even if it doesn't break any official rules.
'This is the classic Wall Street experience—meaning Wall Street gains your money, and you gain experience," claims Michael Green, chief strategist at asset management firm Simplify. 'The funding from the World Liberty Financial investment is being used to buy the product of World Liberty Financial: the token. What you are effectively doing is building a holding company whose sole objective is to create a treasury that can inflate the market capitalization of World Liberty Financial's token.'
The deal has also reignited conflict of interest concerns that have trailed World Liberty Financial since Trump returned to the White House in January.
A company affiliated with the president and his family controls both 22.5 percent of WLFI coins and a 40 percent equity stake in World Liberty Financial. In theory, a politically-motivated actor could curry favor with the US president by investing heavily in ALT5, thereby driving up the price of the stock—which sits on the World Liberty Financial balance sheet—and signaling demand for the WLFI coin, perhaps catalyzing further trading from which the Trump family would benefit.
'If you happen to visit Donald Trump and say, 'by the way, I love that company that you are involved with World Liberty Financial, I just bought a billion dollars of it,' my guess is you're going to get more attention than you otherwise might,' claims Green.
ALT5 and World Liberty Financial did not respond immediately to a request for comment.
'The media's continued attempts to fabricate conflicts of interest are irresponsible and reinforce the public's distrust in what they read,' says Karoline Leavitt, White House press secretary. 'Neither the President nor his family have ever engaged, or will ever engage, in conflicts of interest.'
The Trump family began to tease the launch of World Liberty Financial last August, ahead of the 2024 US presidential election. Initially, it was unclear what services the business would provide; the pitch was simply to 'make finance great again.'
Since then, World Liberty Financial has launched USD1, a so-called stablecoin tied in value to the US Dollar, and the WLFI coin.
WLFI was initially meant to be used only for voting on changes to World Liberty Financial projects, not for trading. But in July, WLFI holders voted by a landslide to make the token tradeable on the secondary market. World Liberty Financial has not yet confirmed when trading will begin.
The crypto treasury strategy that World Liberty Financial is pursuing was first popularized by Strategy—formerly MicroStrategy—a publicly traded software company that has accumulated a trove of bitcoin currently worth more than $74 billion. Strategy has long traded at a value that far exceeds its bitcoin holdings.
Since Trump was reelected in November on a staunchly pro-crypto platform, copycat treasury companies have flooded US public markets. In the last few months, figures including Brandon Lutnick, the son of US commerce secretary Howard Lutnick, and David Bailey, a bitcoin evangelist who reportedly advised Trump on crypto policy, have launched their own respective bitcoin treasury vehicles. Two Nasdaq-listed companies with links to China also recently raised hundreds of millions of dollars to acquire a combination of bitcoin and Trump's memecoin.
'[Strategy] has been the best performing stock of any other on the public market since that first bitcoin purchase. Naturally, other companies are attracted to that return profile,' Bill Papanastasiou, director of equity research at analyst house KBW, told WIRED earlier in the year.
ALT5, with its newly-formed WLFI treasury, is part of this broader phenomenon. But unlike the rest, the underlying coin is not yet publicly tradable.
'World Liberty Financial is declaring that its token, which originally was supposed to be a governance-only token, is now going to be liquid and tradable. As a result, it's very important to create an entity that will buy that token anytime it starts to fall in value,' alleges Green. 'That's really what's happening.'
Others are less skeptical of the economic principles beneath the crypto treasury companies; the opportunity to expand the amount of crypto they hold per share by earning yield on treasury assets, marketing derivatives and issuing convertible debt, they say, justifies the inflated valuations.
'It's sort of anathema to everything I learned as a value investor (...) but I realized there's a real fundamental thesis to why these can and should trade [at a premium to the value of their treasuries],' says Cosmo Jiang, general partner at crypto investment firm Pantera Capital, which has invested in a number of crypto treasury companies. 'They actually remind me a lot of banks, if you boil it down. A bank has a pile of deposits and then goes out and tries to generate yield on those deposits.'
'I'm a bit bullish on these vehicles,' says Thomas Braziel, co-founder of investment firm 507 Capital. 'I'm not sure yet why anybody would be that worried (...) A bubble, maybe it makes a headline, but I don't think it's accurate.'
But even investors who see promise in the crypto treasury strategy recognize a risk associated with the extent of the Trump family's entanglements with the industry, which they fear could result in political blowback if the Democratic party were to return to power.
'The biggest risk to me in crypto right now—if you're a crypto bro or bull—is the unabashed pocket-lining done by the Trump family,' claims Braziel. 'For Trump, if there's no conflict there's no interest.'
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