Trump family crypto project quietly sold as holders got stuck

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Under a governance proposal now before investors, no one — founders or early buyers — will be able to sell their holdings for at least two years, after which tokens would begin unlocking gradually over several more years. Investors who do not accept the new terms risk having their tokens locked indefinitely. Insiders who accept the vesting schedule would also be required to permanently burn 10% of their token allocation, a structure the project said is designed to align founder and investor interests.

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“We have enormous conviction in this vision and take a long-term view towards everything we do, from our fundraising efforts to the careful crafting of governance proposals designed to benefit the entire ecosystem,” said David Wachsman, spokesman for World Liberty Financial.

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The broader Trump family business has been reshaped by crypto. The family built its fortune on licensing the Trump name — real estate, Bibles, sneakers — but digital assets have opened a new revenue stream.

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For World Liberty’s investors, things have worked out differently from what many expected. Early buyers remain locked out of 80 per cent of their token holdings, unable to sell into a market that has already moved sharply against them. WLFI traded below six cents this week to new lows in open trading.

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“It is surreal to have the Trump family not only profiting off this financial venture that features glaring conflicts of interest but doing so in a way that blocks other investors from sharing in the gains,” said Eswar Prasad, a professor at Cornell University.

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The project’s highest-profile external backer has decided to intervene.

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Justin Sun, the billionaire founder of the Tron blockchain, sued the venture in April in San Francisco federal court alleging extortion and an illegal scheme to seize his tokens — charges the project’s co-founders deny. Sun alleged he invested US$45 million into WLFI and has not been allowed to sell a single token.

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Syed Sameer, chief executive of Sameer Group — a Dubai-based investment firm that Syed said has invested in WLFI token alongside UAE institutional partners — posted an offer on X directed at Sun, offering to help negotiate a resolution.

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“Instead of a legal fight,” Syed told Bloomberg, Sun could “reach an amicable solution through neutral intermediaries.” Sun told Bloomberg he relayed Syed’s contact to his lawyers.

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Beyond the lawsuit, the project has deposited 5 billion of its own WLFI tokens into Dolomite, a decentralized lending protocol whose co-founder holds a role at World Liberty, and borrowed roughly US$75 million in stablecoins against them. Critics say the structure may allow insiders to convert holdings to cash instead of waiting for an unlock that could be years away. World Liberty said the position was “nowhere near liquidation” and had repaid US$25 million of the loan, with US$50 million outstanding as of mid-April.

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With token prices falling, World Liberty’s broader corporate orbit is showing strain. Alt5 Sigma, a Nasdaq-listed company that raised US$1.5 billion in August 2025 to accumulate WLFI tokens, announced a pivot to artificial intelligence. A recent filing said it may “redeem or monetize a portion of its token holdings to fund operations, satisfy obligations, or pursue strategic initiatives.” Tony Isaac, Alt5’s chief executive, told Bloomberg the company has no plans to sell the token, and may in fact continue to accumulate it.

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Zach Witkoff, World Liberty’s co-founder and chief executive, chairs Alt5’s board. Zak Folkman, a World Liberty co-founder, also sits on Alt5’s board.

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The troubles are unfolding against a broader reckoning. Across the Trump family’s crypto empire — a memecoin that’s down more than 40 per cent this year and 93 per cent from its post-inauguration peak, a Bitcoin mining venture whose shares have lost much of their value, and now Alt5, down roughly 90 per cent since its pivot to accumulate WLFI — the pattern is similar: projects that rose on the Trump brand are now pivoting or restructuring, as the political trade that drove initial enthusiasm collides with a cooling crypto market. Anyone who bought shares of Trump Media & Technology Group, the parent of Truth Social, over inauguration weekend 2025 has lost roughly three-quarters of their money.