Trump Launches New Cryptocurrency Venture with His Family

Former President Donald Trump hosted an online event on Monday to announce a new cryptocurrency venture tied to his family. As he campaigns for the White House for a third time, Trump seized the opportunity to promote his business interests.

During the livestream, he praised the potential of cryptocurrencies while also discussing a second assassination attempt against him. He took the chance to criticize the Biden-Harris administration regarding border security but did not delve deeply into details about the new crypto firm, World Liberty Financial.

“If we don’t do it, China is going to do it. China is doing it anyway,” Trump stated in his conversation with crypto enthusiast and investor Farokh Sarmad. The two spoke from Mar-a-Lago, Trump’s residence in Palm Beach, Florida. “But if we don’t do it, we’re not going to be the biggest, and we have to be the biggest and the best.”

On the campaign trail, Trump has expressed a range of pro-crypto views, including plans to ease federal regulations on digital currencies and establish a strategic reserve of bitcoin. Recently, he declared his intent to make America the “world capital for crypto and bitcoin.”

This promotion of cryptocurrency marks a significant shift for Trump, who had previously criticized digital currencies. However, with the approaching election, he is now courting campaign contributions and votes by embracing the crypto space.

Trump admitted he was “not overly interested” in cryptocurrency initially, but the success of his Trump-branded digital trading cards—non-fungible tokens (NFTs) depicting him in various creative illustrations—opened his eyes to the market’s potential. According to financial disclosures, he earned approximately $7.2 million in 2023 through a licensing deal for these NFTs.

Cryptocurrencies are digital currencies that can be traded online, independent of traditional banking systems. They have garnered popularity among many Americans, especially among those wary of government oversight, but they tend to attract a younger male demographic.

“I think my children opened my eyes more than anything else,” Trump said, referencing the influence of his family on his perspective regarding cryptocurrencies.

The livestream provided limited information about World Liberty Financial. It will feature its own crypto token, a “stablecoin” designed to maintain a value tied to the U.S. dollar. Stablecoins aim to provide price stability by pegging their values to reliable assets like the dollar.

World Liberty Financial has stated that only accredited investors will be eligible to purchase tokens. Approximately 63% of the tokens will be available to the public. Additionally, 20% will be held by members of Trump’s family and insiders, while 17% are earmarked for user rewards.

In recent discussions, Trump’s two eldest sons have promoted World Liberty Financial but have offered few specific details. Eric Trump mentioned the firm’s goal of fostering “financial independence,” while Donald Trump Jr. asserted that it would “make finance great again.”

They promote the model of decentralized finance, or “DeFi,” which enables users to engage in lending, borrowing, and other financial transactions without intermediaries like banks. Trump has positioned DeFi as a means to prevent “the big banks and financial elites” from taking advantage of average Americans.

Steve Witkoff, a real estate investor and a friend of Trump, believes DeFi could foster a more equitable financial landscape by providing access to credit for those who are unbanked or face difficulties with traditional financial systems. However, DeFi has been criticized for lacking regulatory oversight and consumer protections. Concerns have been raised about its use in illicit activities, including drug trafficking and terrorism.

Some observers within the crypto space have flagged ethical concerns surrounding the project. Austin Campbell, a consultant and long-time crypto expert, expressed skepticism regarding the project’s security measures and operational rigor. “Nothing I have seen about this tells me they have first-rate people in place for security, economic design or operations,” he stated.

The initiative involves key figures such as Trump’s sons and Witkoff’s son, Alex, as part of its founding team. Witkoff revealed that his son had connected him with crypto entrepreneurs Chase Herro and Zak Folkman, who were subsequently introduced to the Trumps.

The specifics of Trump’s role in World Liberty Financial remain unclear, although an internal report identified him as the “chief crypto advocate.”

Trump’s announcement highlights a significant momentum shift for digital currencies as they gain traction in mainstream America, bolstered by institutional interest from Wall Street and endorsements from influential business leaders like Elon Musk.

The involvement of Trump could potentially broaden crypto’s appeal to skeptics who previously shied away from it. “It could be good for crypto in that it’s going to hit different populations that were so skeptical of crypto and were not using crypto at all,” noted Seoyoung Kim, author and finance professor.

Trump’s stance on cryptocurrencies has notably evolved. During his presidency, he regularly expressed criticism of the industry, describing Bitcoin as “a scam” in 2019 and warning about its volatility and potential to facilitate illegal activities.

Now, as a Republican nominee, Trump has embraced the crypto world more enthusiastically, declaring a desire for the U.S. to lead in crypto innovation and production.

However, this blending of personal business interests with political ambitions has raised concerns about potential conflicts of interest. Critics caution that if re-elected, Trump may exploit his presidential power to benefit his own financial ventures.

As the crypto industry gears up for 2024, it stands out as a significant player in political funding, having amassed over $170 million for pro-crypto candidates this election cycle. Trump’s campaign has already indicated its acceptance of cryptocurrency donations to rally support from the “crypto army.”

Not every member of the crypto community is supportive of Trump’s new business endeavor. Concerns about potential hacking and security breaches could pose serious risks for World Liberty Financial. Experts have warned that high-profile projects, such as Trump’s, often attract hackers.

In a recent incident, unauthorized posts directing readers to a fraudulent version of the World Liberty Financial website appeared on social media accounts of some of Trump’s family members, further highlighting security vulnerabilities.

Corey Caplan, an advisor to World Liberty Financial, emphasized that prioritizing security is of utmost importance for their operations.

In response to potential risks, crypto investor Nic Carter has noted that the visibility of World Liberty Financial makes it a prime target for sophisticated hacking attempts.

Source: USA Today