A sudden injection of $30 million into President Donald Trump's nascent cryptocurrency business from a Chinese billionaire who was sued by the Securities and Exchange Commission for allegedly defrauding investors could raise the stakes for the president-elect's connections. A company could pay you an eight-figure salary.
The investment raises new questions about Trump's ability to potentially profit from foreign investors and his stance on cryptocurrencies after the presidential election, in which he vowed to make the United States the “crypto capital of the planet.” caused concern.
Crypto billionaire Justin Sun, who famously bought a $6 million banana art piece last month, last week announced a $30 million investment in President Trump-backed World Liberty Financial. became the largest investor in
The influx of cash also triggered a provision that allows companies associated with Trump to receive 75% of the company's net revenues, under terms outlined in recent company filings.
Mr. Trump's affiliate DT Marks DEFI LLC is expected to make more than $15 million in profits from Mr. Sun's investment, raising concerns about the potential impact on Mr. Trump's cryptocurrency positions and Mr. Sun and his company. There are renewed concerns about the future of SEC lawsuits over alleged violations of securities laws. Sun and his company deny any wrongdoing.
Jordan Libowitz, vice president of Citizens for Responsibility and Ethics, a progressive Washington watchdog group, said, “When we talk about money in politics, we have more influence than the person who directly gave us an eight-digit number.'' It's difficult to have power.”
The investment comes after President Trump recently named veteran regulator and crypto advocate Paul Atkins to head the Securities and Exchange Commission and Silicon Valley venture capitalist David Sachs to the White House's AI and crypto czar. This comes after a series of candidates to promote cryptocurrencies were announced, including Mr.
Trump denies all allegations that he has profited from his presidency.
Republican presidential candidate and former President Donald Trump at the Dort Financial Center on September 17, 2024 in Flint, Michigan.
Scott Olson/Getty Images
“President Trump stepped away from his multibillion-dollar real estate empire to run for office and put his government payroll upfront,” Caroline Leavitt, Trump and Vance transition spokeswoman, said in a statement to ABC News. Ta. “Unlike many politicians, President Trump is not in politics for profit. He is fighting because he loves the people of this country and wants to make America great again.”
World Liberty Financial and Justin Sun did not respond to requests for comment.
“We have to be No. 1.”
Despite previously calling cryptocurrencies a “scam,” Trump announced his support for World Liberty Financial in September. World Liberty Financial is a decentralized financial platform that could eventually become a marketplace for lending and borrowing various cryptocurrencies.
At the time of the announcement, President Trump said of the United States' position in the cryptocurrency market: “We have to be number one.” “I think AI is really important, but I think cryptocurrency is one of the things we have to do.”
World Liberty Financial currently generates revenue through token sales, which give investors a say in the company's governance. However, the tokens do not provide a share of the company's revenue and cannot be resold.
Tron founder Justin Sun during the Token2049 conference in Singapore on September 14, 2023.
Joseph Nair/Bloomberg via Getty Images, File
Although Mr. Trump is not an officer or employee of the company, DT Marks DEFILLC receives a large portion of World Liberty Financial's profits if the business is successful, leading some ethics experts to believe that the company may have given money to Mr. Trump. They have expressed concern that it could be used as a means to divert people's attention. .
“To call this an ethical issue is to underestimate how fundamentally corrupt it is,” said Robert Wiseman, co-director of consumer advocacy group Public Citizen. “They set up a way for people to funnel money to Donald Trump, and it’s happening now.”
Two months after its founding, the company faced criticism for its vague business plan beyond its association with President Trump, and failed to gain much traction in the crypto space. James Butterfill, head of research at asset management firm CoinShares, said the company's early marketing materials offered little more than “buzzwords.”
The weak start-up also suggested the founders and the Trumps would see little profit from the business. World Liberty Financial had less than $30 million in revenue before Sun's investment, so the company's terms state that all the money the company raises is used to cover operating costs while the Trumps make nothing. It will be kept as a reserve fund. So-called “gold paper”.
Enter eclectic crypto billionaire Justin Sun. Before he spent millions on bananas duct-taped to walls, he garnered headlines by spending more than $500,000 on pet rock NTFs and more than $4.5 million on lunches. With Warren Buffett.
A $30 million investment through Tron, the popular cryptocurrency he founded in 2017, made him the project's largest investor and reignited interest in the once-struggling platform.
“The US is becoming a blockchain hub and Bitcoin is thanks to @realDonaldTrump!” Sun wrote to X announcing the investment.
“You'll want to run away.”
Last year, the SEC accused him of manipulating the value of cryptocurrencies and paying celebrities including Lindsay Lohan, Ne-Yo and Jake Paul to promote the assets, without disclosing the amounts paid. and sued the company. Sun and his company have denied any wrongdoing, and the celebrities settled their cases without admitting or denying the charges.
Tron and other cryptocurrencies have also come under criticism for allowing criminals to carry out financial transactions undetected, with a report by the United Nations Office on Drugs and Crime calling Tron the “The preferred option for crypto money launderers in the sector.” TRON leadership said the report's claims were “inaccurate” and “supports the United Nations' stance against malicious actors in the blockchain space.”
After a $30 million investment, World Liberty Financial appointed Mr. Sun as an advisor, saying his “insight and experience will help the company grow.”
Wiseman told ABC News he was concerned about the deal.
“This is exactly the kind of number you would want to run away from if you were starting a business, but they're embracing it,” Wiseman said of World Liberty Financial and Sun.
The investment could be lucrative for Sun, given President Trump's involvement with the project and the number of cryptocurrencies that have risen since the election. On Thursday, the stock price of the major cryptocurrency Bitcoin exceeded $100,000 for the first time.
“With so many cryptocurrencies, having good PR and having a good voice can really help get something noticed. There has never been a better time for World Liberty Financial,” said Butterfill. said. “The line between this being a private endeavor and the public connections that Mr. Trump has is very blurry, and the kind of person who runs World Liberty Financial probably takes that into account a little bit. It will happen.”
Trump's name and likeness are featured throughout World Liberty Financial's website and marketing materials, and Trump himself is listed as the company's “chief cryptocurrency advocate.” It has been clarified that neither Mr. nor his family members are directors of the company. The company said World Liberty Financial was “inspired” by Trump and “reached out to a broader audience who may have previously been unfamiliar with or hesitant to engage with decentralized assets and cryptocurrencies.” The company hopes to introduce the platform to its “audience”.
“They're trying to take advantage of President-elect Trump's popularity and the fact that he just won the election to see if they can get this thing off the ground,” said Scott Amy, general counsel for the watchdog group. Projects on government surveillance.
“Money is in the hands of future presidents”
Mr. Sun and Mr. Trump have never met, but multiple ethics experts ABC News spoke to also believe that this investment, and Mr. Trump's profits from it, could lead to the Securities and Exchange Commission's aggressive policies. He expressed concern that this could affect Mr. Trump's virtual currency policy, including whether he will continue to pursue it. The lawsuit was filed under the Biden administration.
“Putting money in the hands of a future president to influence who makes those decisions at the SEC in the face of charges from the SEC is a pretty good investment,” Libowitz said.
Steve Witkoff, a longtime friend of President Trump and co-founder of World Liberty Financial with his sons, told ABC's “Good Morning America” in September that President Trump's foray into cryptocurrencies is He said there would be no conflict. Trusts — similar to what President Trump did during his first administration when he placed assets in revocable trusts controlled by his sons and business associates.
But experts say the deal does not completely eliminate concerns about conflict stemming from President Trump's cryptocurrency ventures. Experts say Mr. Trump still has broad visibility into the status of his assets, can profit from them and has the power to regain control of them, all of which are important in conflict prevention. It is said to limit the validity of the trust.
“Even if he doesn't sell and exits these investments completely, he still stands to profit from them,” Amy said.
