Donald Trump has launched a new cryptocurrency venture, World Liberty Financial, with the help of two self-proclaimed "crypto punks," Chase Herro and Zachary Folkman. Just last week, Trump hosted a livestream featuring these relatively unknown figures in the crypto world, prompting media outlets to investigate their backgrounds and business credentials.
Herro and Folkman, both 39-year-old entrepreneurs, are leading the project and assisting Trump in his latest pivot towards embracing cryptocurrency, despite his previous dismissal of blockchain technology and digital assets as a "scam" just three years ago.
Chase Herro describes himself as a "rags-to-riches" entrepreneur. Despite a past that includes convictions for theft and marijuana possession, as well as a brief stint in jail, Herro has overcome financial difficulties such as car repossessions and tax liens. He eventually made his first million by mastering social media marketing.
Zachary Folkman began his entrepreneurial career with a business called Date Hotter Girls, where he conducted seminars teaching men how to approach women in bars. He once claimed participants would be "ripping their clothes off and throwing them up against the wall." Like Herro, Folkman has faced financial challenges, including being sued by American Express for over $70,000 in unpaid credit card bills and dealing with a significant tax debt in California.
Two Entrepreneurs with Little Track Record to Show are Leading WLF
Herro and Folkman have established at least 17 companies, as revealed by a recent New York Times investigation. They often register these businesses in the US Virgin Islands and Puerto Rico, focusing primarily on social media marketing and quick-profit ventures in the cryptocurrency and ecommerce sectors.
Among their notable enterprises were The Nexus Group, a social media advertising firm, and Subify, a subscription platform for online creators. However, both faced legal issues and are now inactive.
In the US Virgin Islands, where they reside, they encountered lawsuits from property owners alleging over $36,000 in unpaid rent and $75,000 in damages. Additionally, they were involved in a failed crypto project, Dough Finance, which suffered a significant hack in July 2023, resulting in a $2 million loss for its users. Herro also backed the failed crypto project Terra Labs, whose collapse of its native assets LUNA and UST stablecoin led to billions in investor losses.
Trump Could Be Using WLF to Help His Son Barron Pursuit His Crypto Ambitions
The connection between Donald Trump and Herro-Folkman emerged through an introduction by real estate mogul Steve Witkoff, a close friend of the former president. Despite limited knowledge of cryptocurrency, Witkoff believed the entrepreneurs had something valuable to offer. World Liberty Financial (WLF) is reportedly a decentralized finance (DeFi) project aimed at facilitating borrowing and lending for individuals outside the United States and US-based accredited investors.
Details about the platform's operation remain scarce. Interestingly, Donald Trump's youngest son, 18-year-old Barron, is described as the "visionary" behind WLF. It is unclear if this is accurate, as wealthy parents often associate their children with projects to give them a head start, similar to DJ Khaled naming his toddler son as an executive producer on his album. However, Barron has shown some interest in cryptocurrency.
Barron has been unofficially linked to a failed meme coin called TrumpCoin (DJT), which was previously promoted as Donald Trump's official cryptocurrency. The DJT token's value plummeted by over 90% shortly before Barron's older brothers, Donald Jr. and Eric, began promoting WLF. The timing has led to speculation that launching WLF is a strategic move to prevent Barron from engaging in dubious crypto projects that could lead to legal issues and further damage his father's reputation.
If this theory holds, Herro and Folkman would assist Barron in realizing his vision for the project by handling the technical aspects. Critics of WLF, like former SEC senior official John Reed Stark, have dismissed it as "nonsense" and a poor investment opportunity.
WLF doesn't introduce anything new to the DeFi space beyond the endorsement of high-profile political figures and the Trump organization's financial resources. Existing borrowing and lending platforms in this space are already successful and trusted by the crypto community. Moreover, Trump, his sons, Herro, Folkman, Witkoff, and Barron lack experience with crypto projects.
While Trump's popularity might attract users to WLF, its success will largely depend on user-friendliness. Additionally, the project is limited to accredited investors in the US, significantly narrowing its potential audience to individuals with high incomes or a net worth exceeding $1 million.
Trump’s Involvement with Business Projects Raises Ethical Questions
Donald Trump's involvement with World Liberty Financial brings up significant concerns regarding potential conflicts of interest. If elected president, he would have the power to influence regulations impacting the success of his cryptocurrency venture. This situation is part of a larger trend where Trump intertwines his personal finances with his political goals, as demonstrated by his social media platform Truth Social and various campaign-themed branded products. Alarmingly, his campaign has spent over $28 million on businesses he owns, such as his resorts and a company he established to operate his private jet, funded by campaign resources. Essentially, Trump is channeling millions of dollars in campaign funds into his own enterprises. He appears unconcerned about concealing these questionable practices, likely because he perceives U.S. campaign finance laws as ineffective.
The launch of World Liberty Financial, just weeks before the election, seems to target cryptocurrency enthusiasts, typically younger individuals who often have lower voter turnout. Trump has made other efforts to connect with this demographic, including using Bitcoin (BTC) to purchase hamburgers and Diet Cokes during a campaign event in Greenwich Village. This initiative also signifies a notable shift in Trump's stance on cryptocurrencies. His transition from a crypto skeptic to an advocate raises questions about the authenticity of his position and the potential impact of his business interests on his policy decisions.
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WLF Caters to a Small Audience of Wealthy Individuals in The US
Trump has limited access to World Liberty Financial in the US to only accredited investors, who are generally seen as financially knowledgeable and aware of the risks involved in such investments. However, this approach is puzzling, as it could damage his public image with minimal potential gain in a highly competitive market where he and his partners lack experience. The backgrounds of Herro and Folkman, which include legal issues, unpaid debts, and questionable business practices, further undermine the venture's credibility and prospects for success. With the 2024 election on the horizon, Trump's business dealings and political aspirations are likely to be scrutinized by Democrats, who may use this situation to question his ethics as a candidate.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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