Written by Michelle Conlin and Tom Wilson
NEW YORK/LONDON (Reuters) – On Sunday, shortly before Donald Trump’s inauguration, crypto investor Mike Dudas bought more than $145,000 worth of tokens from World Liberty Financial, a crypto startup owned by the US president.
Unlike traditional crypto investments, World Liberty Financial tokens give their owners a vote in decisions about product features and marketing. Crypto tokens like bitcoin and ether can be used to make payments or develop applications.
Dudas said he invested because he is friendly with the advisers of the project and is happy with their plan to make money under Decentralized Finance (DeFi) easily accessible. DeFi is a financial network that operates on crypto, without traditional gatekeepers like banks.
“I think they’re going to appreciate the value,” Dudas told Reuters, explaining why he bought the tokens. “I believe that the Trump DeFi company could be very valuable and that the public sale price was attractive.”
World Liberty Financial was announced two months before the US election by Trump, his three sons and one of his top advisers, real estate billionaire Steve Witkoff. The company has so far raised at least $300 million selling tokens, known as $WLFI, according to Reuters figures based on World Liberty’s website and social media posts.
Trump’s crypto ventures, including a meme coin known as $TRUMP that is worth $7.7 billion in just a few days, are raising concerns among ethics experts, market participants and others about the risks of conflicts of interest and the power to influence executives. Trump has long licensed his name to sell everything from steaks to condos to housing courses, such as at the now-defunct Trump University.
Ethics experts say Trump does not appear to have broken any laws. Although federal laws prohibit executive branch officials from getting involved in policy matters that would affect their financial interests, that law does not apply to the president or vice president.
The Trump administration, the Trump Organization, World Liberty Financial and Steve Witkoff, Trump’s special envoy to the Middle East, did not respond to requests for comment.
So far, Justin Sun, the Chinese-born crypto entrepreneur who founded the blockchain network Tron, has emerged as the most prominent buyer of the token, spending at least $75 million, according to his post on X purchases. Sun has been an organization where Trump. direct financial benefits He raised concerns about potential conflicts of interest and ethics because of allegations that Tron is being used by militant groups and pending lawsuits filed by US security regulators.
Reuters identified five others–in locations including Gibraltar and Puerto Rico–who bought millions of WLFI tokens, based on interviews and data from Singaporean blockchain analytics firm Nansen.
To identify these people, Reuters reviewed data from Nansen – which uses algorithms, investigations and user submissions to identify the people behind anonymous crypto wallets. Reuters then verified its investment through interviews and analysis of public opinion on social media.
The main draw for some of them: connections to Trump, according to interviews with Dudas and two other investors.
World Liberty Financial is “directly connected to our new crypto president Donald Trump,” said Sigil Fund, a Gibraltar-based fund whose chief investment officer is one of the investors.
The CIO, who goes only by the pseudonym “Fiskantes,” spent 40 ether tokens, worth about $130,000 on Wednesday in $WLFI tokens, he said in an email.
“Fiskantes is doing some WLFI monkeying,” the fund said, using a popular term in the crypto world for investing in new projects without due diligence.
BIG WINNING?
Trump and other undisclosed entities will reap 75% of World Liberty Financial’s revenue and own up to 22.5 billion WLFI tokens through subsidiaries. The project on Wednesday sold another 22 billion tokens to investors. It is not clear how much of that money, if any, went to Trump, according to World Liberty’s “gold sheet” on its website.
Unlike factories and warehouses, the costs of setting up crypto companies are negligible, said Jeff Hauser, director of the nonprofit Revolving Door Project, which considers executive branch employees. “So political investment is a way to influence it.”
Trump said earlier this month that he would give his children day-to-day management of his business assets when they move into the White House.
Asked Tuesday if he would continue to sell products like his $TRUMP coin that began inauguration weekend and that could benefit him during his presidency, Trump said: “I don’t know much about it other than I’ve launched it. I’ve heard. It’s been very successful. Where is it today?”
Dudas, who founded crypto media outlet The Block, bought 9.7 million tokens at 1.5 cents each, according to blockchain records he shared with Reuters. World Liberty Financial tokens cannot be resold to other investors.
When asked if he was concerned about the prospect of any conflict of interest, Dudas dismissed the idea. “This is very different from the meme coin in the name of the President,” Dudas said, referring to the $TRUMP coin with an image from the assassination attempt on the President. Dudas emphasized that World Liberty is about the future of distributed finance.
He was once a Democrat but is now registered Independent (LON:), Dudas said he donated to Republicans during the last election cycle, citing what he described as the Biden administration’s hostility to the crypto industry.
THEY ARE NOT REMAINING
Token sales are recorded anonymously on the blockchain, the public ledger that supports crypto transactions.
Nansen identified a number of other owners who could not be independently verified by Reuters. Reuters was also unable to find the number of token holders.
Tron’s Sun is the largest foreign investor in the token, according to this analysis.
In 2023, the SEC charged Sun with fraud related to crypto trading and concealing payments to celebrities to promote his companies. The case is still ongoing. The Swiss businessman said the SEC’s charges “lack merit.” He did not respond to a request for comment. The SEC did not respond to a request for comment.
Another buyer of the tokens is Troy Murray, a crypto entrepreneur based in Puerto Rico, according to Nansen data. Murray bought about 666,000 WLFI tokens, the data shows.
In 2023, Murray was hit by the SEC with a cease-and-desist order on the blockchain company he developed to sell complex investments in crypto asset vehicles, in violation of securities laws. The case was tried that year.
“I was curious about the legal structure they set up for token sales, and when I got to all the steps I could think of, why not?” Murray told Reuters in a message to X, adding a “whynot” emoji.
