Secret
Deals, Foreign Investments, Presidential Policy Changes: The Rise of Trump’s
Crypto Firm
World
Liberty Financial has eviscerated the boundary between private enterprise and
government policy in ways without precedent in modern American history.
Eric Lipton David Yaffe-Bellany Ben Protess
By Eric
LiptonDavid Yaffe-Bellany and Ben Protess
April 29,
2025
https://www.nytimes.com/2025/04/29/us/politics/trump-crypto-world-liberty-financial.html
“ZMoney” was
Zachary Folkman, an entrepreneur who once ran a company called Date Hotter
Girls and was now representing World Liberty Financial, the cryptocurrency firm
that Mr. Trump and his sons had recently unveiled. Mr. Folkman was writing to a
crypto startup in the Cayman Islands, offering a “partnership” in which the
firms would buy each other’s digital coins, a deal that would bolster the
startup’s public profile.
But there
was a catch, The New York Times found. For the privilege of associating with
the Trumps, the startup would have to make, in effect, a secret multimillion
dollar payment to World Liberty.
“Everything
we do gets a lot of exposure and credibility,” Mr. Folkman wrote, asserting
that other business partners had committed between $10 million and $30 million
to World Liberty.
The Cayman
startup rejected the offer, as did several other firms that received a similar
pitch from World Liberty, executives said. They considered the deal unethical,
concluding that World Liberty was essentially selling an endorsement — and
hiding the arrangement from the public.
World
Liberty’s executives, who have maintained that they did nothing improper, were
undeterred. They successfully pitched similar deals to other firms while also
marketing their coin to buyers around the world, reaping more than $550 million
in sales, with a large cut earmarked for the president’s family.
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 endeavors pose
conflicts of interest that compare to those that have emerged since the birth
of World Liberty.
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.
Mr. Trump is
now not only a major crypto dealer; he is also the industry’s top policy maker.
So far in his second term, Mr. Trump has leveraged his presidential powers in
ways that have benefited the industry — and in some cases his own company —
even though he had spent years deriding crypto as a haven for drug dealers and
scammers.
He has
filled his administration with sympathizers to the crypto cause, including by
appointing a former adviser to industry players as chairman of the Securities
and Exchange Commission. In addition, the Justice Department recently disbanded
a crypto crimes task force, continuing a broader unwinding of Biden-era
scrutiny of the industry.
A Times
examination of World Liberty’s rapid ascent from fledgling startup to
international force — and Mr. Trump’s conversion from crypto skeptic to
industry cheerleader — highlights the range of conflicts of interest trailing
the company:
World
Liberty has directly benefited from Mr. Trump’s official actions, such as his
announcement of a federal crypto stockpile that would include a digital
currency the firm has invested in. The president’s announcement caused a
temporary jump in the value of World Liberty’s holdings.
World
Liberty has sold its cryptocurrency to investors abroad, including in Israel
and Hong Kong, according to interviews and
data obtained by The Times, establishing a new avenue for foreign
businesses to try to curry favor with Mr. Trump.
Several
investors in World Liberty’s coin managed firms that the federal government
accused of wrongdoing. They include an executive whose fraud case was suspended
after he invested millions of dollars in World Liberty. Other investors and
business partners, some of whom haven’t been publicly identified before, are
looking to expand in ways that will require the Trump administration’s
approval.
World
Liberty proposed swapping cryptocurrencies with at least five start-ups, and
often used the Trump name to solicit steep payments as part of the deals. Even
in an industry with a disreputable history, the deals raised alarm among
veteran executives.
“It’s a
black spot on our industry,” said Andre Cronje, a founder of SonicLabs, a
crypto firm that turned down World Liberty’s pitch. Anyone who accepted would
“obviously think they’re going to make money because it’s the officially
endorsed Trump project.”
A spokesman
for World Liberty, David Wachsman, disputed that any of the company’s deals
constituted a “one-sided payment for services rendered.” But he acknowledged
that the company has engaged in “mutual investment deals,” and said that its
deal-making had resulted in “thoughtful, strategic exchanges between parties
who stand to mutually benefit.”
Mr. Wachsman
also said it would be “false, absurd and dangerous to suggest that investments
or partnerships with World Liberty Financial were conducted as some sort of
political quid pro quo.”
“Never has
an investor or partner requested any political favoritism,” he said. “Nor would
we ever entertain such a possibility.”
Still, the
company’s deal-making benefits the president’s family. A Trump business entity
owns 60 percent of World Liberty, according to the company’s website, and is
entitled to 75 percent of certain revenue from coin sales, which could be
converted into cash.
“It’s one of
the more successful things we’ve ever done,” Eric Trump, the president’s son
who runs the family business, said in an interview this month at the Trump
Doral golf course in Florida.
He and his
older brother, Donald Trump Jr., are actively involved in World Liberty, though
they rely on three partners to oversee the daily operations. Two of them, Mr.
Folkman and Chase Herro, have a mixed track record in crypto. The other is Zach
Witkoff, the son of Mr. Trump’s envoy to the Middle East, Steve Witkoff, who is
also a World Liberty founder.
In recent
days, Zach Witkoff, Mr. Folkman and Mr. Herro were in Pakistan meeting with the
country’s prime minister, Muhammad Shehbaz Sharif, and other top government
officials to discuss World Liberty. The trip, complete with limousines, a dance
performance and police escorts, seamlessly blended the president’s business
interests with the trappings of a state visit. (Mr. Wachsman said no U.S.
government officials were involved in the meetings.)
President
Trump has noted that conflict of interest laws do not apply to him, and that he
has broad immunity for official actions he takes as president.
In a
statement, a spokeswoman for President Trump noted that his “assets are in a
trust managed by his children,” and that as a result, “there are no conflicts
of interest.” (The trust still benefits President Trump directly.)
World
Liberty’s supporters are unbothered by questions about conflicts.
“Trump wants
to make a lot of money in crypto,” Konstantin Kuznetsov, a Russian citizen
living in Miami whose Gibraltar-based firm bought $1 million of World Liberty’s
coins, said in an interview. “We can join in this wave.”
Chief Crypto
Advocate
As a
businessman who made his name in the tactile world of real estate, Donald Trump
never aspired to build a digital coin empire.
Indeed, at
the end of his first term, Mr. Trump turned to social media to express disdain
for cryptocurrencies.
They “are
not money,” he warned. Their “value is highly volatile and based on thin air.”
By last
year, his views had begun to shift.
His older
sons had become enthusiastic crypto proponents after the Jan. 6, 2021, attack
on the Capitol effectively exiled the family business from the mainstream
financial system.
“We built
and sold and held real estate forever. And for a long period of time, I had
access to everyone in the world,” Donald Trump Jr. explained in a live video
appearance at a crypto conference in Washington last month. “All of a sudden
that became really difficult. And I sort of realized very quickly just how much
discrimination there is in the ordinary financial markets.”
The change
of heart also coincided with an influx of millions of dollars in campaign
contributions from the crypto industry into the Trump re-election effort. Under
the Biden administration, the industry had faced nearly 100 enforcement actions
by the S.E.C., and crypto executives wanted a leader to champion their
interests in Washington.
During his
campaign stumps, Mr. Trump’s qualms about crypto appeared to vanish. At a
Bitcoin conference in July, he vowed to turn the United States into the “crypto
capital of the planet.”
Bitcoin
Bitcoin is
the original cryptocurrency and still the most valuable by far. At current
prices, one Bitcoin is worth about $94,000.
Two months
later, Mr. Trump completed his conversion, announcing that he and his sons
would enter the crypto marketplace with a new venture called World Liberty
Financial.
Mr. Trump
delivered the news in a livestream at his Mar-a-Lago estate in Florida, where
he had gathered with Eric and Donald Jr., along with Mr. Herro and Mr. Folkman.
“Crypto is
one of those things we have to do,” Mr. Trump said. “Whether we like it or not,
I have to do it.”
Mr. Herro
and Mr. Folkman were unusual choices to partner with a president.
Mr. Folkman,
who has short curly hair and tattoos,
ran a company in his 20s tutoring forlorn men on how to pick up women. In
numerous podcast appearances, Mr. Herro has recounted his life’s redemption
arc, describing a wild youth in which he was charged with marijuana possession
and spent a couple of weeks in a Wisconsin jail.
The two men
had worked together for years, selling everything from colon cleanses to
get-rich-quick advice, before pivoting to crypto with uneven results.
In 2022, Mr.
Herro urged a roomful of crypto enthusiasts to invest in the currency TerraUSD,
calling it “one of the coolest assets in history.” The coin imploded a month
later, erasing billions of dollars in wealth. Mr. Herro’s most recent venture
with Mr. Folkman was a crypto platform called Dough Finance, which was hacked
in July, leading to the theft of $2 million.
It’s not
clear exactly how the pair earned the Trumps’ trust. But Steve Witkoff said
last year that he met them through his son, and then introduced them to the
family.
On the
livestream introducing World Liberty, Donald Trump Jr. hailed the men as
first-class financial minds.
“You could
put them in a boardroom at Goldman Sachs, and they’re going to smoke the people
in the room,” he said.
In October,
Mr. Herro and Mr. Folkman got to work on the company’s first initiative —
selling a new cryptocurrency, which it called $WLFI, with the goal of $300
million in sales.
These coins
would be different from $TRUMP — the so-called memecoin that spiked in January
after Mr. Trump marketed it to his followers before it abruptly crashed.
Memecoin
A memecoin
is a type of cryptocurrency based on an online joke or celebrity mascot. It has
no practical function other than speculation. After $TRUMP’s initial surge, its
price plummeted, costing investors a cumulative $2 billion.
World
Liberty, at least according to its marketing pitch, eventually plans to operate
as a new type of internet bank that would allow customers to borrow and lend
money in various digital currencies. Anyone who bought the $WLFI coins would
get to vote on certain bank business decisions like shareholders in a
traditional company.
Mr. Trump
was at the core of the pitch. The company published a 13-page “Gold Paper” that
described its mission and leadership team. On the cover was a portrait of Mr.
Trump, styled to look as if gold paint had been splashed across the page.
He would
serve as the company’s “Chief Crypto Advocate,” the paper said.
When World
Liberty launched, the Trump family and its affiliates were given 22.5 billion
units of the crypto coins — a stash now
worth at least $1.1 billion on paper, depending on the various prices used in
recent sales.
Under the
company’s rules, the Trumps and other World Liberty investors are not allowed
to sell their coins on the open market, though the company has said it might
eventually lift that restriction if other buyers of the coin agree.
Initially,
there were few buyers. By the end of October, World Liberty had sold only $2.7
million worth of the coins, a tiny fraction of its goal.
Election Day
was a game changer.
A Flood of
Investors
With polls
closed in most of America and Mr. Trump on his way to victory, the World
Liberty account on X posted a celebratory message on Nov. 5: “Big things on the
horizon.”
Soon a surge
of investment flowed into World Liberty’s cryptocurrency.
Most crypto
purchases are recorded on a public ledger called the blockchain, with the
buyers and sellers largely anonymized. But World Liberty has said it performs
extensive checks on investors in its coin, so it knows who they are.
Blockchain
The
blockchain is the publicly viewable ledger of all cryptocurrency transactions.
Every time someone spends money with a digital coin, it shows up as an entry,
allowing investigators to track the flow of funds. In most cases, the
identities of the buyers and sellers are concealed behind strings of letters
and numbers.
An analysis
performed for The Times by the forensics firm Nansen, drawing on crypto
industry data, showed that many of the investors were based abroad in places like Singapore, South Korea, Hong
Kong and the United Arab Emirates.
Federal law
prevents foreigners from donating to presidential campaigns or inaugural funds,
but World Liberty’s coin sale offered a new, legal way to back Mr. Trump.
“The main
reason for purchasing such a token was to support Trump’s inauguration, as he
was the first crypto-friendly president of the United States,” said Keer Lau,
chief strategy officer at Orbiter Finance, a Hong Kong-based entity.
Some
investors, domestic and overseas, have managed firms that ran afoul of U.S.
regulations. One was Yoni Assia, an Israeli who founded eToro, an online
trading platform whose U.S. subsidiary reached a $1.5 million settlement with
the S.E.C. last year for crypto-related violations. Troy Murray, a Puerto
Rico-based investor, also bought World Liberty’s coin. Before that, he had
helped create BarnBridge, which in late 2023 agreed to pay the S.E.C. $1.7
million to settle its own crypto-related accusations.
Since Mr.
Trump took office, some World Liberty investors have pushed the government for
regulatory approvals, or are poised to interact with the administration as they
try to build or expand businesses in the United States.
In March,
Mr. Assia’s company notified the S.E.C. that it intended to go public in the
United States. DWF Labs, a crypto firm based in the United Arab Emirates,
announced this month that it had bought $25 million of $WLFI — and that it was
opening a New York office.
“Our
visibility in the U.S. has been increased because of this deal,” Andrei
Grachev, the managing partner of DWF Labs, said in an interview. “We would like
to have direct dialogue with the policymakers.”
The crypto
executive with perhaps the most to gain from his affiliation with World Liberty
is Justin Sun, a Chinese billionaire who founded the crypto platform Tron.
Mr. Sun
gained global attention late last year, when he spent $6.2 million at an art
auction to buy a banana that had been duct taped to a wall. Not long after, Mr.
Sun made another headline-grabbing maneuver: He spent $75 million on $WLFI
coins.
The
investment drew widespread criticism given that Mr. Sun had a clear incentive
to gain favor with the Trump White House. During the Biden administration, the
S.E.C. sued Mr. Sun, arguing that he had fraudulently inflated the price of a
Tron cryptocurrency.
Mr. Sun has
denied the S.E.C.’s charges, and in a text message to The Times last year, he
said his World Liberty investment was simply a vote of confidence in the Trump
family’s “excellent project.”
In late
February, the S.E.C. asked a federal judge to halt proceedings in Mr. Sun’s
case: The agency said it was exploring “a potential resolution.” The judge
granted the stay.
The Stars
Align
Justin Sun
gave World Liberty a big lift. But Mr. Trump’s company wanted more money. Much
more.
So World
Liberty executives soon announced what they called “a transformative
initiative” to partner with other crypto outfits and invest in their coins. The
strategy, the executives said in February, would leverage World Liberty’s
growing clout to help their lesser-known partners.
“It’s like
taking care of your brother in the space,” Mr. Herro said at a crypto event in
New York that month.
But World
Liberty’s public pronouncements omitted a key aspect of its private pitch to
several crypto startups, executives at these companies told The Times. World
Liberty wanted to sell its own coin — not just to invest in others’. It was
proposing a currency swap.
Here is the
deal World Liberty offered, according to executives at three crypto firms
approached by the company: The startups would spend between $10 million and $30
million on a large chunk of World Liberty’s coins. In return, World Liberty
would buy a smaller amount of each startup’s own cryptocurrency. World Liberty
would keep the rest of the money for itself — a premium as high as 20 percent.
World
Liberty’s purchases would signal to the market that Mr. Trump’s firm had deemed
the startups worthy of investment. But the market would have no way of knowing
that World Liberty had been compensated for that endorsement. Some details of a
similar pitch from World Liberty were previously reported by Blockworks, an
industry news outlet.
“They kept
telling us, ‘We’re like, we’re super close to Trump,’” said Mike Silagadze, the
chief executive of Ether.Fi, a crypto startup that World Liberty approached.
“We
immediately rejected,” said Dominik Schiener, who founded the IOTA Foundation,
a Berlin-based group that also received the pitch. “It’s a very dishonest
approach.”
In his
statement, Mr. Wachsman, the World Liberty spokesman, said The Times’s
reporting contained “fundamental misunderstandings about standard industry
practices” and called the company’s business arrangements “not only common in
the blockchain industry but essential for creating lasting economic alignments
in business, generally.”
“These
arrangements establish skin in the game for all parties,” he added.
The benefits
of a partnership were enough to attract at least five crypto firms to strike
other deals with World Liberty, without disclosing details of the financial
arrangements, The Times found.
In one deal,
the Sui Foundation, a U.S.-based group, announced that World Liberty would buy
an unspecified amount of its cryptocurrency, prompting Sui’s price to jump more
than 10 percent. As part of the arrangement, the foundation was slated to
receive World Liberty’s coins in return, said two people familiar with the deal
who requested anonymity to discuss private negotiations.
Other World
Liberty partnerships have shown how Mr. Trump is mixing his official role with
his business. In December, the company announced that it would use technology
designed by a startup based in Lisbon, Ethena Labs. It also bought more than $5
million of Ethena’s cryptocurrency.
One of
Ethena’s investors is Arthur Hayes, a crypto entrepreneur who pleaded guilty to
violating the Bank Secrecy Act in 2022 and was sentenced to six months of home
detention. Last month, Mr. Trump granted Mr. Hayes a pardon. (A spokesman who
represents both Ethena and Mr. Hayes declined to comment.)
Another
World Liberty partner is Ondo Finance, a New York-based startup backed by
Founders Fund, the conservative billionaire Peter Thiel’s venture capital firm.
World
Liberty made its first purchase of Ondo’s coins in December, buying more than
130,000 of them. The transaction at least briefly helped drive up the price of
Ondo’s coin, drawing headlines in crypto news sites celebrating World Liberty’s
bet.
In January,
Ondo donated $1 million to Mr. Trump’s inauguration, securing an invite to a
candlelight dinner at the National Building Museum in Washington, where the
guest list included several of Mr. Trump’s cabinet nominees. Ondo also helped
sponsor an inauguration event called the Crypto Ball. Soon after, Donald Trump
Jr. and World Liberty’s management team were headliners at a conference Ondo
organized in New York.
“This is a
moment we weren’t sure was gonna happen,” Ian De Bode, Ondo’s chief strategy
officer, said from the stage. “But sometimes the stars align.”
‘Thank Me
Later’
In February,
Eric Trump passed along some investment advice to his followers on Elon Musk’s
social media platform, X: “In my opinion, it’s a great time to add $ETH.”
It was the
ticker symbol for a digital coin called Ether. “You can thank me later,” he
added, before deleting that line.
His advice
proved prescient.
The next
month, his father announced the creation of a “U.S. Crypto Reserve” — a Fort
Knox-like repository of cryptocurrencies intended to help bolster the industry.
Ether
Ether is the
second-most valuable cryptocurrency behind Bitcoin, worth about $1,800 at
current prices. Many of the most influential crypto companies use the coin to
conduct transactions and build financial applications.
Mr. Trump’s
announcement included a list of digital currencies to go into the stockpile.
Along with Bitcoin, he included Ether, saying it would be “at the heart of the
Reserve.”
Ether’s
price surged more than 13 percent.
The spike
had an immediate beneficiary: World Liberty. Over the previous few months, the
company had bought $240 million worth of Ether, according to Arkham, a crypto
data firm.
The day the
president announced the crypto reserve, the value of World Liberty’s Ether
stash rose by $33 million, assuming it had not sold any of its holdings. That
gain was later lost as Ether declined in value.
That same
pattern — Mr. Trump making policy pronouncements or posting messages that
intersected with World Liberty’s business interests — occurred again in March.
In a video
feed at a crypto conference in New York, Mr. Trump called on Congress to pass
legislation governing stablecoins, a type of crypto designed to maintain a
value of $1.
Stablecoin
Stablecoins
are a type of cryptocurrency that maintain a constant price of $1. They differ
from traditional digital currencies like Bitcoin, which constantly fluctuate in
price, making them easier to use for certain types of transactions. Companies
that issue stablecoins operate similarly to banks: The issuers make money by
taking deposits from investors, giving them coins in return and then investing
those deposits to generate a yield that the companies keep.
Both the
Senate and the House have introduced bills that would make it easier for firms
issuing stablecoins to operate in the United States. In his remarks last month,
Mr. Trump said that the rise of stablecoins would “expand the dominance of the
U.S. dollar.”
A week
later, World Liberty announced it was releasing its own stablecoin, USD1. “The
future is here, and it is so bright!” Zach Witkoff wrote on X.
Jordi
Alexander, a crypto executive who helped World Liberty with its plans to launch
its stablecoin, said in an interview that the company had already secured
commitments of at least $1 billion from investors to buy the stablecoin once it
hits the market.
The new
venture will only compound World Liberty’s ethical conflicts. The company plans
to offer USD1 on a platform developed by Binance, a giant exchange that settled
criminal charges with the Justice Department in 2023. This week, Mr. Witkoff,
Mr. Herro and Mr. Folkman met with Changpeng Zhao, Binance’s founder and former
chief executive, in Abu Dhabi.
Mr. Zhao,
who served four months in federal prison for money-laundering violations, has
been seeking a pardon from the Trump administration, according to people
familiar with the matter, who requested anonymity to discuss a sensitive topic.
The pardon effort was first reported by The Wall Street Journal.
The overlap
between Mr. Trump’s policy pronouncements and his business interests have
alarmed congressional Democrats, who moved recently to amend the pending
stablecoin legislation to bar the Trump family from issuing one.
The
amendment failed, and none of the concerns about World Liberty have disrupted
its momentum.
Last month,
Mr. Witkoff was among a group of executives invited to the White House for a
first-of-its-kind industry summit.
After the
meeting, Mr. Witkoff posted a photograph on social media of him smiling outside
the White House next to Mr. Herro and Mr. Folkman.
“Thank you
Mr. President,” Mr. Witkoff wrote.
Susan C.
Beachy contributed research.
Eric Lipton
is a Times investigative reporter, who digs into a broad range of topics from
Pentagon spending to toxic chemicals.
David
Yaffe-Bellany writes about the crypto industry from San Francisco. He can be
reached at davidyb@nytimes.com.
Ben Protess
is an investigative reporter at The Times, covering President Trump.
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