Pakistan tieup question mark on Trump-backed crypto firm
That was just five days after terrorists attacked tourists in Pahalgam and killed 26, sparking a sharp escalation in India-Pakistan tensions leading to the brink of conflict. New Delhi has said two of the three attackers were Pakistani, while the neighbouring country has denied any involvement.
The World Liberty team included Zachary Folkman, Chase Herro and Zachary Witkoff, who run the company. They met Pakistan Prime Minister Shehbaz Sharif and chief of army staff General Asim Munir, among others, according to the Dawn newspaper. World Liberty Financial signed a "Letter of Intent with Pakistan Crypto Council to accelerate blockchain innovation, stablecoin adoption and decentralised finance integration across Pakistan," according to a press release cited by Dawn. Trump's Policy, Business Overlap
The accord amounted to "a major step toward positioning Pakistan as a global leader in the digital finance revolution" and would bolster "Pakistan's position as one of the fastest-growing crypto markets in the world," it said.The letter was signed during a meeting between World Liberty Financial and the council that was attended by that country's finance minister, Muhammad Aurangzeb, by video, Dawn said. Also present were council CEO Bilal Bin Saqib, the chairman of the Securities and Exchange Commission of Pakistan and the State Bank governor, it added.While Trump hasn't shied away from schemes to make money even after being elected president, this particular venture skates close to the edge, according to a New York Times article on Tuesday.World Liberty Financial, which was started in 2024, had approached several crypto startups for a currency swap deal. It proposed that the startups buy $10-million and $30-million chunks of its coins in return for a smaller amount of the startups own currency.The Trump platform would keep the rest of the money-at premiums as high as 20%--against expectations that the association would bolster the startup's profile, the NYT said. These payments were kept confidential, it added.The NYT unearthed several overlaps between Trump's policy pronouncements and his business interests with the crypto firm.
"Mr Trump's return to the White House has opened lucrative new pathways for him to cash in on his power, whether through his social media company or new overseas real estate deals. But none of the Trump family's other business endeavours pose conflicts of interest that compare to those that have emerged since the birth of World Liberty," the paper said. "The firm, largely owned by a Trump family corporate entity, has erased centuries-old presidential norms, eviscerating the boundary between private enterprise and government policy in a manner without precedent in modern American history."
Neighbour's Ambitions Pakistan Crypto Council, with the backing of Trump and Binance founder Changpeng Zhao, wants to establish the country as the "crypto capital of South Asia" and compete with markets like the UAE. Such a move would likely meet with approval by Trump, given that nations like Switzerland, Australia and South Korea have rejected the idea of a crypto national reserve.According to Chainalysis in 2024, Pakistan was ranked ninth in crypto adoption, with an estimated 25 million active crypto users and $300 billion in annual crypto transactions. India was ranked one.Last month, council chief Bin Saqib said the country would adopt a more liberal approach toward legitimising crypto while criticising India's policy of taxing the trade at 30%. "We've seen this mistake before. India putting 30% tax on their crypto trades drastically reduced the exchange volume, our approach will be different," he told Bloomberg.India's policy advisers said that since India has made crypto a taxable instrument without any legal recognition, it opens the doors for illegal trade."Middle East countries are already a bypass route for many Indian investors to trade using VPN and evade taxes," said one of them. "If new offshore and cost-effective exchanges start emerging in Pakistan, a lot of our trading activity can shift there. The larger worry for national security is Indians' financial data falling into the hands of Pakistani entities."
Crypto & Co
An entity affiliated with Donald J Trump, known as DT Marks DEFI LLC, owns approximately 60% of the equity in WLF Holdco LLC, the holding company behind World Liberty, and is entitled to 75% of certain revenues from coin sales. The US President serves as 'Chief Crypto Advocate,' while his sons, Eric and Donald Jr, both hold the title of 'Web3 Ambassador.' Son Barron is listed as the project's 'DeFi Visionary.'The firm is run by Folkman, who once ran a dating company; Herro, who was once jailed for marijuana possession; and Witkoff, the son of Trump's special envoy to the Middle East Steve Witkoff, who is also a World Liberty cofounder.
In October 2024, the company raised approximately $300 million by selling 20 billion WLFI tokens at $0.015 each. The platform also plans to launch a stablecoin, USD1, pegged to the US dollar and backed by US Treasuries and other cash equivalents. In the run up to Trump's inauguration as president in January, he launched the $TRUMP and $MELANIA meme coins. The companies behind the Trump token, CIC Digital LLC and Fight Fight Fight LLC, co-owned by CIC Digital, collectively own 80% of the tokens. Their relationship with World Liberty is not established.Earlier this month, World Liberty's founders met Binance founder Changpeng Zhao in Abu Dhabi. Zhao has served a four-month jail term after pleading guilty to crypto fraud.The Trump crypto platform also secured a $25 million investment from DWF Labs, a Dubai-based market maker, to enhance liquidity for its USD1 stablecoin and support its US market expansion.NYT said the secret multimillion dollar payments to World Liberty raised questions about a possible quid pro quo, citing instances.For instance, Justin Sun, a Chinese billionaire who founded the crypto platform Tron, recently invested $75 million in $WLFI coins. Sun had been sued by the Joe Biden administration for fraudulently inflating the price of Tron. But in late February the Securities and Exchange Commission asked a federal judge to halt proceedings in the case in favour of exploring a "potential resolution."Another investor in World Liberty is Ethena's founder Arthur Hayes, who was sentenced to six months of home detention, but was granted a pardon last month.
Separately, in December last year, the platform bought 130,000 coins from New York-based Ondo Finance. In January, Ondo donated $1 million to Trump's inauguration and also helped sponsor an event called Crypto Ball. Trump supporter and Elon Musk's close associate, Peter Thiel, is a funder of Ondo Finance. In another instance in February, Eric Trump wrote, "In my opinion, it's a great time to add $ETH" on X. He also wrote "You can thank me later," deleting that last line subsequently. The next month, his father announced the creation of a "US Crypto Reserve," including Bitcoin and Ether.
The US Senate has also introduced a bill to support the issuance of stablecoins in the US, just a week before introducing World Liberty's stablecoin USD1.
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