Donald Trump’s new ‘cryptocurrency’ project appears to be based on code from a hack that resulted in nearly $2 million being stolen this summer, while the Trump family’s X/Twitter account was hacked in an attempt to drain Trump fans’ digital wallets.
On September 3, CoinDesk reported on the white paper underlying the Trump family’s decentralized finance (DeFi) project, World Liberty Financial (WLF). The project appears to share DNA, including its founders and code, with Dough Finance, an “open-source protocol that creates non-custodial liquid markets for supplying and borrowing assets to earn interest.”
The WLF team includes four members of Dough Finance: Zachary Folkman, Chase Herro, Octavian Lojnita, and the pseudonymous developer 0xboga. Folkman once ran a ‘pick-up’ business called Date Hotter Girls, which included a ‘masterclass’ on how to become the ‘ultimate alpha male.’
The whitepaper also lists Trump and his three sons (Donald Jr., Eric, and 18-year-old Barron) as members of the WLF. Barron is described as the WLF’s “DeFi visionary,” his brothers are “Web3 Ambassadors,” and their father has the grandiose title of “Chief Crypto Advocate.” (In other words, none of them seem to have any real duties beyond shilling.)
According to WLF’s whitepaper, the project will involve decentralized borrowing/lending via the Aave platform and a “credit account system” built on the Ethereum network. The project will also feature a non-transferable governance token (WLFI) that will allow users to “propose and vote on adding new DeFi lending markets or integrating new blockchains.”
If the codebase removed from Github is any indication, WLF relies heavily on Dough Finance’s technology. It’s unclear whether the code currently underpinning WLF contains the same vulnerability that led to the exploit that resulted in the $1.8 million loss.
On July 12, Dough Finance was exploited following a series of flash loan transactions. Hackers used a vulnerability in the protocol’s smart contracts to steal a quantity of ‘wrapped’ ETH tokens, which they then laundered via the Ethereum-based Tornado Cash coin mixing service.
On September 4, the official WLF X/Twitter account posted a thread attempting to reclaim the narrative, stating that WLF was “taking no risks” and that the project’s code had been “thoroughly reviewed” by “security experts” including BlockSec, Fuzzland, PeckShield, and Zokyo.
The thread also stated the WLF’s mission as “Making crypto and America great by driving mass adoption of stablecoins and decentralized finance.” The WLF claims to “ensure the continued dominance of the US dollar by spreading US-pegged stablecoins around the world, and secure America’s financial leadership and influence on the global stage.”
WLF warned skeptics that “our plan will speak for itself. We are backed by some of the brightest minds in crypto, and what’s about to happen will make any doubters think twice.” Well, considering all of our backers are the ultimate alpha males, right?
Who rules the governor?
As expected, the Trump family appears to be looking to make a fortune from WLF, at least in terms of the project’s “governance” token allocation. According to the whitepaper, 70% of WLFI tokens are “held by the founders, team, and service providers.”
These insiders will also receive a portion of the remaining 30% of the public sale proceeds, while an additional chunk of the sale proceeds will be reserved to “support the operations of (WLF).” WLF spokesperson Jim Redner told CoinDesk that the project “hasn’t finalized its token economics yet.”
Still, if WLF is considering the above distribution, it would place control of all WLF decisions in the hands of a handful of individuals who mostly share the same last name. It would also reinforce widespread suspicions that WLF is just another crypto cash grab, following Trump’s four NFT collections, the “Crypto President” sneaker line, and other cliche crypto crap.
Don’t be fooled by their scams, wait for our scams!
Some of Trump’s pro-crypto bros have expressed anger at the prospect of competing with their family’s DeFi project, including Castle Island Ventures partner Nic Carter, who also said WLF “would really hurt Trump’s electoral prospects, especially if they get hacked.”
The Trump family offered little assurance on security when news broke on September 3 that the X/Twitter accounts of Eric’s wife and Republican National Committee co-chair Lara Trump and Donald’s daughter (with Marla Maples) Tiffany had been compromised by hackers. The accounts appeared to promote WLF, but the links they directed users to were fraudulent.
Eric was the first to sound the alarm, tweeting “THIS IS A SCAM!!!” The official WLF account quickly added its own warning, “DO NOT CLICK ON ANY LINKS OR BUY TOKENS,” referring to the scam website. The compromised account was quickly locked, and Eric praised X/Twitter (and its Trump-loving owner Elon Musk) for their “amazing” response time.
This isn’t the first time WLF promoters have been compromised. Earlier this week, The Independent reported that an advert from an unaffiliated channel promoting the ‘World Liberty Financial Airdrop’ appeared on WLF’s official Telegram channel. The ad promised up to $15,000 in tokens to anyone who linked their wallet, but anyone who did so would see their wallets depleted.
The official WLF channel warned its 230,000 subscribers not to fall for this scam, but at least one of these ads remained on the channel. 4 days Before being removed, WLF also informed its followers that it “does not conduct airdrops or token sales.” At this time.” (emphasis added)
Single Issue Donor
While Trump’s presidential rival Kamala Harris appears to be slightly ahead of him in national polls, a recent poll from Fairleigh Dickinson University found that Trump’s advocacy of cryptocurrency won him over a majority of crypto voters.
The survey, conducted between August 17 and 20, found Trump leading Harris 50-38 among “potential voters who own cryptocurrencies,” while Harris led Trump 53-41 among voters who do not own cryptocurrencies. Of the 801 voters surveyed, 15% said they own or have owned digital assets, meaning Harris’ 12-point lead is in a group five times larger than Trump’s.
Does any of this matter? Not according to Nick Beauchamp, an assistant professor of political science at Northeastern University. In a Northeastern Global News article published on September 3, Beauchamp said cryptocurrencies are “almost nobody’s on the list of important issues, and most people either don’t know about it or have a basic opinion about it.”
Beauchamp added that “the crypto ‘voting bloc’ is not voters, it’s donors… There are a number of crypto donors who care very much, and they are the only reason campaigns make crypto statements, and probably the only reason many Republicans and some Democrats, like[Senate Majority Leader]Chuck Schumer, are resistant to regulation.”
make it rain
Most of the crypto industry, almost all of its strong-minded members, bet on Trump before Harris won the Democratic nomination from President Joe Biden. Since then, the industry has been trying to cover its butts in case Trump loses and is left with a bunch of worthless IOUs.
President Trump attended the BTC Nashville conference in late July and claimed to have raised around $25 million from crypto heavyweights, mostly through $844,600-per-seat roundtable events held around the conference.
Expectations for the Sept. 13 fundraiser benefiting Harris are much more modest, with a goal of raising at least $100,000. Organizers, including Tiffany Smith (co-chair of law firm WilmerHale’s Blockchain and Cryptocurrency Working Group) and Clive Mesidor (founder of the Blockchain, Women of Color, National Policy Network), told Reuters the goal of the gathering is to “make a statement about what cryptocurrencies mean for the Democratic Party as they potentially grapple with how the new administration might view them.”
The Crypto4Harris group recently hosted an online town hall attended by top Democratic officials, including Schumer and several House members, to raise additional funds.
On September 4, Fortune quoted Alessia Haas, CFO of the Coinbase (NASDAQ: COIN) digital asset exchange, as saying that Harris “is now using Coinbase Commerce to accept cryptocurrency for her campaign.” However, a Coinbase spokesperson later clarified that the Future Forward USA PAC, which supports Harris, is accepting cryptocurrency donations through the payment platform. The Trump campaign has been using Coinbase Commerce since May.
A ‘Cryptocurrency’ Congress?
Paul Grewal, Coinbase’s chief legal officer, told Bloomberg this week that “there will be a crypto-friendly Congress” regardless of which party or candidate wins the November election. Coinbase has been one of the largest campaign donors in the current election cycle, giving more than $50 million to certain political action committees, including the cryptocurrency-focused Fairshake.
When Congress reconvenes after its summer break, both parties will have a chance to woo their “crypto” constituents. The House Financial Services Committee is likely to hold several hearings on digital asset bills that have been brought up during the current session. The committee’s chairman, Rep. Patrick McHenry (R-NC), is retiring in January and has said he expects a bill providing some federal oversight of cryptocurrencies to come to the floor for a vote.
On September 10th, the committee’s Subcommittee on Digital Assets, Financial Technology, and Inclusion will take a closer look at DeFi in a hearing titled Decoding DeFi: Analyzing the Future of Decentralized Finance. We sincerely hope that Trump’s new project collapses before it reaches the public and that MAGA investors somehow find a way to blame it on the Democrats.
Warren vs. Deaton
One interesting voting race where ‘cryptocurrencies’ will certainly play a role is the Senate seat currently held by digital asset skeptic Elizabeth Warren (D-MA). On September 3, John Deaton, the attorney representing Ripple Labs in its fight with the Securities and Exchange Commission (SEC), won the Republican primary for the right to challenge Warren.
Deaton has received significant cash infusions from crypto luminaries, including $1 million from Ripple and additional funds from the famous Winklevii from Gemini. Fairshake has yet to open its wallet for Deaton, but the cash could start flowing as the November matchup with crypto arch-rival Warren becomes official.
Deaton said he would “advocate for a smart and tailored cryptocurrency policy,” but in an interview with Fox Business, he said his campaign would focus on “serious issues that are more pressing than crypto.” Deaton also claimed Warren is “the crypto candidate, not me,” adding that Warren “built her reelection campaign around building an anti-crypto army.”
Warren effectively threw down the gauntlet following Deaton’s victory, telling WBUR, “The question now is, can crypto buy this seat?” The bigger question is, can crypto buy the presidency?
Watch: Aaron Day and Kurt discuss CBDCs, blockchain, and the US economy.
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