President Donald Trump and his three sons have taken a step that would permit them to cash out the digital “tokens” created by the family’s cryptocurrency firm, intensifying concerns from ethics experts about potential conflicts of interest.
On May 19, four anonymous digital wallets simultaneously moved more than 20 billion in $WLFI — one of the two crypto “tokens” launched by the Trumps’ firm — to a vesting contract. The new contract kicks off a waiting period after which the accounts are able to sell their holdings.
One of the exchanges was for the precise amount of crypto that Trump was awarded when setting up the firm, World Liberty Financial, which he controls. Three of the others match precisely the amount of crypto given to other relatives of the president. Trump’s sons — Don Jr., Eric, and Barron — are the only other family members who have been identified as founders.
The change to the holdings has not been previously reported. In a statement to The Washington Sun, Eric Hageman, a partner at a law firm representing World Liberty Financial, said that new governance rules approved by the company required its founders to move the tokens to a vesting contract and denied that the new vesting contract represented a first step toward a sale of the tokens.
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“The premise of your questions is misguided,” Hageman said. “WLFI token holders approved a governance proposal that obligated the founders to burn 10 percent of their holdings.”
However, three experts who reviewed World Liberty Financial’s governance documents told The Washington Sun that the transaction was optional, and government watchdogs are concerned the Trump family is taking steps to get a payout.
“It has never been clear what World Liberty Financial was supposed to do other than enrich the Trumps, and here we have them taking the first avenue they can to offload their coins,” said Zach Everson, the research director at Public Citizen.
David Wachsman, a spokesman for World Liberty Financial, emphasized that there was still a two-year vesting period before the tokens could be sold. “You must note that co-founder’s tokens are unable to be sold for a very long time,” Wachsman said. “There are no imminent sales.”
World Liberty Financial brands itself as a “next-generation financial platform” that will improve the speed and efficiency of sending money between platforms. Government watchdogs have long warned that it could instead amount to a legal way for foreign investors and domestic consumers to curry favor with the Trump family by purchasing a “token” currency of little real value.
While their value would decline if sold, the tokens owned by the family are currently valued at more than $1 billion. The president has already reported more than $550 million in income from sale of World Liberty Financial tokens, while retail investors have lost $1 billion from their investments in the company, according to an analysis by a blockchain company.
Hageman said the founders were obligated to remove 10% of their $WLFI holdings from circulation, and that “the only way” to do so was to move them into a vesting contract. Wachsman also said that “all” the co-founders of the company agreed to the “overwhelmingly popular governance proposal.”
The company’s latest governance rules, approved on May 6, state that founders “will have the option to elect less favorable unlock terms or remain locked indefinitely.” Before the transfers, the crypto tokens were considered “locked” and could not be moved. After the transfers, the tokens can be sold after a vesting period.
Additionally, the governance document states the conditions of the vesting contract apply “if” founders “opt in.” It adds that if a founder “does not affirmatively accept this new vesting schedule, their tokens will not be burned and they will continue to have their tokens locked indefinitely.” The tokens can be used to vote on World Liberty Financial’s governance.
“They could’ve stuck with the indefinite lock,” said Molly White, a crypto expert who runs a newsletter covering cryptocurrency, technology, and tech policy. “They say explicitly in the WLFI proposal that was voted in that it was optional … The Trump family is laying the groundwork to cash out their WLFI stake.”
Trump’s personal allotment of 14.175 billion in $WLFI tokens has a current market value of roughly $1 billion, though that would surely plummet if the president tried to sell them. The other three accounts, appearing to belong to Trump’s sons, each contain roughly 2.75 billion in $WLFI tokens, which would likely be worth hundreds of millions of dollars in the event of a sale.
The opportunity to use Trump’s crypto firm to buy influence with the White House has raised alarms. Chinese crypto billionaire Justin Sun bought $75 million in $WLFI tokens, after which the Securities and Exchange Commission dismissed an outstanding civil fraud lawsuit against Sun and his businesses. Four days before Trump’s inauguration, a firm backed by top officials in the United Arab Emirates also purchased a 49% stake in the family crypto firm.
The White House has previously said Trump has “no involvement in business deals that would implicate his constitutional responsibilities.”
Hageman and Wachsman did not respond to requests for comment explaining the diverging interpretations of the company’s governance documents.
“It’s right there in the documents: It’s an option. The terms of the deal make it clear that the big insider holders have the option to choose which investment path their tokens go down,” said Corey Frayer, who served as senior adviser to former SEC chair Gary Gensler, who is now the director of investor protection for Consumer Federation of America. “Within that set of options, one of them is to exit out. And it looks like they’re trying to turn their monopoly money into something that is real.”
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