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Lately, convicted fraudster Donald Trump has really gotten into crypto, which he has favorably dubbed as “crazy new currencies.” Over the past few years, Trump has dabbled in the industry, lending his likeness to “digital trading cards,” or non-fungible tokens, that made him look like a superhero or, I don’t know, a Masonic lodge member marching in a local St. Patrick’s Day parade. Even Melania got in on the NFT weirdness. But Trump and his sons have been teasing a bigger, “real deal” crypto venture for months. On Monday, he finally announced it: a Trump-backed crypto bank called World Liberty Financial. Right now, it’s a meme company that aspires to one day be a bank, a lender, and an exchange all at the same time. What could go wrong?
World Liberty is, as of right now, really more of a fakakta idea than it is a functioning company. At this point, there is little to go on about how it actually operates beyond its own marketing, which leans heavily into the well-worn Trump family narrative.
“Folks, we all know how crooked banks and financial institutions rig the system against everyday Americans,” Donald Trump Jr. wrote, according to a message in the company’s Telegram channel. (Junior, as well as Eric and Barron Trump, are reportedly involved in the company’s operations.) “They shut people out, deny them loans, drown them in paperwork and kill them with legal and processing fees. Our entire family has experienced this first hand … we’ve been de-banked, de-platformed and had every political game imaginable played on us.” In fact, Trump’s embrace of crypto has really ramped up ever since he was temporarily barred from most New York banks after losing this civil fraud trial earlier this year.
As far as it purports to be anythingWorld Financial is a so-called decentralized finance (or DeFI) company, with a corporate structure that gained rapid popularity in crypto circles in 2020 and 2021 for supposedly cutting out banking-industry middlemen. But DeFI fell out of favor, in part, because it was so vulnerable to being hacked and robbed. One of the largest and most infamous DeFI projects were the twin digital tokens TerraUSD and Luna, conceived by the abrasive founder turned fugitive turned prisoner Do Kwon, whose collapse led directly to the end of Sam Bankman-Fried’s empire. And World Financial’s pedigree isn’t exactly inspiring: One of the brains behind it, Mark Herro, is an ex-colon cleanser salesman and affiliate marketing guy who has called himself a “dirtbag of the internet.” Another influential voice is Zachary Folkman, who used to run pickup-artist seminars on YouTube.
A few reports noted how strange it was that Trump would launch a new company less than 50 days until the election. But the timing here makes sense when you look at another deadline. On September 19, the lock-up period ends for Trump Media & Technology Group, Trump’s fraud-riddled social-media company. This means that insiders, including Trump, could start selling their shares. This, in turn, has created a problem for Trump. If he sells, the price will plummet. Since Trump owns more than half of the company’s shares, his Trump’s paper fortune would plummet, and he would run out of an easy way to access cash. (“I’m not selling,” Trump claimed last week.) Trump’s net worth has already fallen by hundreds of millions of dollars, and even some of its most die-hard traders will short the stock to make a quick buck. Trump has so far been able to put off his money problems, but World Financial is likely another way to tap his supporters to pay his bills.