NEW YORK/LONDON, Jan 23 (Reuters) - Ahead of Donald Trump's inauguration, cryptocurrency investor Mike Dudas acquired over $145,000 worth of tokens from World Liberty Financial, a fledgling crypto company partially owned by the former U.S. president.
In contrast to typical cryptocurrency investments, the World Liberty Financial tokens offer holders a say in decisions concerning product features and marketing strategies. Cryptocurrency tokens like bitcoin and ether serve purposes such as transactions and application development.
Dudas stated that he invested due to his acquaintance with the project's advisors and his enthusiasm for their goal of increasing accessibility to decentralized finance (DeFi). DeFi represents a financial network operating on cryptocurrency, without conventional intermediaries like banks.
"I believe they will appreciate significantly in value," Dudas conveyed to Reuters, elaborating on his token purchase. "I think a Trump DeFi company has the potential for considerable worth, and the initial sale price was appealing."
Initially introduced just two months prior to the U.S. election by Trump, his three sons, and prominent advisor Steve Witkoff, a billionaire real estate mogul, World Liberty Financial has raised at least $300 million by vending tokens known as $WLFI, states Reuters assessments based on the company's website and social media content.
Concerns have been raised by ethics experts and industry players over Trump's cryptocurrency initiatives, specifically the $TRUMP token, which has swiftly escalated in value to $7.7 billion. Trump's wide array of business ventures underscores potential conflicts of interest and influence over governmental matters. Despite ethical scrutiny, Trump is not believed to have breached any laws.
The silence from the Trump administration, Trump Organization, World Liberty Financial, and Steve Witkoff, Trump's special envoy to the Middle East, in response to comments, is noteworthy.
Besides Justin Sun, the Chinese-born crypto entrepreneur behind the blockchain network Tron, Reuters has identified five other notable investors across locations like Gibraltar and Puerto Rico, who have collectively purchased millions of $WLFI tokens.
Some investors cited a primary attraction to World Liberty Financial as its affiliation with Trump, reflecting an interest in the President's involvement in the venture. Moreover, Trump and undisclosed affiliates are anticipated to receive 75% of certain World Liberty Financial revenues and hold roughly 22.5 billion $WLFI tokens through subsidiaries.
Jeff Hauser, director of the nonprofit Revolving Door Project, remarked that the costs associated with establishing cryptocurrency businesses are minimal compared to traditional establishments, emphasizing the potential for political investments to influence such ventures.
Dudas, the founder of crypto news outlet The Block, expressed confidence in World Liberty Financial's vision for decentralized finance, dismissing concerns about conflicting interests. He differentiated World Liberty Financial from a "meme coin" inspired by the President, highlighting the project's focus on the decentralized finance landscape.
These token transactions are recorded anonymously on the blockchain, the decentralized public ledger supporting cryptocurrency transactions, fostering transparency and security in the crypto sphere.
Tron’s Sun emerges as a significant external investor in the token, according to analysis.