A few days before President Trump’s inauguration, the promotion of ‘ZMoney’ appeared on the encrypted messaging app Signal.

“ZMoney” refers to Zachary Folkman, an entrepreneur who previously operated a dating app company called Date Hotter Girls, and currently serves as a representative for WLFI. Zachary Folkman was then writing to a crypto assets startup in the Cayman Islands, proposing to establish a “partnership”, where both parties would purchase each other’s digital currencies, enhancing the public image of the startup through this transaction.

However, The New York Times found that there was a hidden clause. In order to obtain the privilege of cooperating with the Trump family, this startup company actually had to secretly pay millions of dollars to WLFI.

Zachary Folkman wrote: ‘Everything we do has received a lot of exposure and reputation,’ and claimed that other business partners have pledged to donate 10 to 30 million US dollars to WLFI.

WLFI executives said the Cayman Islands startup rejected the proposal, as did several other companies that received similar invitations from WLFI. They believe the deal is unethical, seeing WLFI essentially selling the traffic brought by its political endorsement and keeping this hidden from the public.

WLFI executives insist that they have not engaged in any improper behavior, and their actions have not been obstructed as a result. They successfully marketed similar transactions to other companies, as well as promoted WLFI tokens to buyers worldwide, ultimately generating sales of over $550 million, with a significant portion of the profits being distributed to the president’s family.

Trump’s return to the White House has opened up new avenues for him to use his power to seek profits, whether through his social media company or new overseas real estate transactions. But the conflict between the Trump family’s other business activities and power pales in comparison to the range of related transactions brought about by the creation of WLFI.

WLFI is mainly owned by entities of the Trump family business, breaking centuries-old social norms for presidents and blurring the lines between private enterprise and government policy in unprecedented ways in modern American history.

Trump is now not only an important trader of Crypto Assets, but also the highest policy maker in the industry. So far, in his second term, Trump has used his presidential power to benefit the industry. Despite mocking Crypto Assets as a haven for drug dealers and scammers for many years, he continues to make profits for his companies through Crypto Assets.

The Trump administration team includes sympathizers of the crypto asset industry, including appointing a cryptocurrency industry advisor as chairman of the U.S. Securities and Exchange Commission (SEC). In addition, the Department of Justice recently disbanded a special cryptocurrency crime working group, continuing to significantly relax the scrutiny of the industry during the Biden era.

The New York Times investigated WLFI’s rapid rise from a startup to an international force, as well as Trump’s transformation from a skeptic of crypto assets to a staunch supporter, highlighting a series of conflicts of interest for the company.

• WLFI directly benefits from actions taken by the Trump administration, such as his announcement to establish a federal crypto assets reserve that includes digital currencies invested in by WLFI. The president’s statement has temporarily boosted the value of assets held by WLFI.
• According to interviews and data obtained by The New York Times, WLFI has sold its cryptocurrency to overseas investors, including those from Israel and Hong Kong, paving a new path to curry favor with foreign companies like Trump.
• Several investors of the cryptocurrency management company under WLFI have been accused by the federal government of improper conduct. This includes an executive whose alleged fraud case was suspended after investing millions of dollars in WLFI. Other investors and business partners are seeking business expansion, which requires approval from the Trump administration.
• WLFI proposed to trade crypto assets with at least five start-up companies and frequently demanded high rewards in the name of Trump. These transactions have aroused the vigilance of senior executives.

Sonic Labs founder Andre Cronje said, ‘It’s a stain on our industry, anyone who accepts the project obviously thinks they will make money because this is a project officially endorsed by Trump’.

WLFI spokesperson David Wachsman denies that any of the company’s transactions constitute ‘one-sided service payments.’ However, he acknowledges that the company did participate in ‘joint investment transactions’ and stated that these transactions facilitated ‘carefully considered strategic exchanges between the parties, mutual benefit.’

David Wachsman also said that he believes any investment or cooperation with WLFI as a kind of political exchange is “false, absurd, and dangerous.” He said, “No investor or partner has ever asked for any political bias, and we will never consider this possibility.”

However, the transactions made by WLFI still benefit the president and his family. According to the WLFI website, a commercial entity owned by Trump holds 60% of WLFI’s shares and has the right to receive 75% of the income from token sales, which can be converted into cash.

Eric Frederick Trump, the son of the president of the family business, said during an interview at the Trump Doral Golf Course in Florida this month, “This is one of the most successful things we have ever done.”

He and his brother Donald John Trump actively participated in WLFI, although they relied on three partners to oversee the daily operation of the project. Two of them, Zachary Folkman and Chase Herro, have a mixed record in the crypto assets field. The other one is Zach Witkoff, who is the son of Steve Witkoff, the US special envoy to the Middle East in the Trump administration, and also one of the founders of WLFI.

In recent days, Zach Witkoff, Zachary Folkman, and Chase Herro met with the Prime Minister of Pakistan, Muhammad Shehbaz Sharif, and other senior government officials to discuss the WLFI project. The trip was arranged with luxury cars, dance performances, and police escorts, seamlessly blending the President’s business interests with the formality of a state visit.

President Trump pointed out that the conflict of interest law does not apply to him, and he enjoys broad exemptions for official actions taken as president.

A spokesman for President Trump pointed out in a statement that his ‘assets are managed by a trust fund managed by his children’, so there is ‘no conflict of interest’.

Supporters of WLFI do not care about the issues surrounding the conflict. Konstantin Kuznetsov, a Russian citizen living in Miami, said in an interview, ‘Trump wants to make big money in the Crypto Assets field.’ His company is located in Gibraltar and has purchased $1 million worth of World Liberty Crypto Assets. ‘We can join this trend.’

Chief Crypto Assets Advocate

As a businessman who made a name for himself in the real estate industry, Trump has never been eager to establish a digital currency empire. In fact, at the end of his first term, Trump expressed contempt for crypto assets through social media. He warned that they are “not money” and their value is “extremely unstable and baseless.” By last year, his views began to change.

On January 6, 2021, the Capitol was attacked, family businesses were expelled from the mainstream financial system, and his eldest sons subsequently became fervent supporters of Crypto Assets.

“We build, sell, and permanently hold real estate. For a long time, I can reach everyone in the world,” Donald John Trump explained via live video at a crypto assets conference held in Washington last month. “Suddenly, it became very difficult. I quickly realized how severe the discrimination in the traditional financial markets is.”

Meanwhile, millions of dollars in campaign donations from the crypto assets industry have also flowed into Trump’s reelection campaign. During the Biden administration, the crypto assets industry faced nearly 100 enforcement actions by the U.S. Securities and Exchange Commission (SEC), and industry executives hope to find a leader in Washington who can protect their interests.

During the campaign, Trump’s doubts about Crypto Assets seem to have disappeared. At a Bitcoin conference in July, he vowed to make the United States the ‘capital of global Crypto Assets’.

Two months later, Trump completed a conceptual shift, announcing that he and his son would enter the Crypto Assets market by establishing World Liberty Financial company.

Trump announced the news via live broadcast at his Mar-a-Lago estate in Florida, where he was joined by Eric Frederick Trump, Donald John Trump, Zachary Folkman, Chase Herro, and Zach Witkoff. ‘Crypto Assets is one of the things we must do,’ Trump said. ‘I have to do it whether we like it or not.’ It is rare to choose Chase Herro and Zach Witkoff as partners of the president.

Zachary Folkman keeps short curly hair, has tattoos on his body, and in his early twenties, he ran a company, providing guidance for down-and-out men to approach women. In multiple podcast episodes, Chase Herro tells the story of his redemption in life, describing his wild youth. He was once charged with possession of marijuana and spent a few weeks in a prison in Wisconsin.

The two have been working together for many years, selling all kinds of products, from colon cleansers to get-rich-quick schemes, later shifting to Crypto Assets, but the results were not consistent.

In 2022, Chase Herro encouraged cryptocurrency enthusiasts to invest in TerraUSD, calling it “one of the coolest assets in history.” A month later, TerraUSD collapsed, turning billions of dollars of wealth into nothing. The cryptocurrency platform recently collaborated on by Chase Herro and Zachary Folkman is Dough Finance, which was hacked in July, resulting in the theft of 2 million dollars.

It is currently unclear how these two people gained the trust of the Trump family. However, Steve Witkoff said last year that he met them through his son and then introduced them to the Trump family.

During the World Freedom Organization live broadcast, Donald John Trump praised these individuals as top-notch financial talents.

He said, “You can put them in the Goldman Sachs conference room, and they will amaze everyone in the room.”

In October, Chase Herro and Zachary Folkman began work on the company’s first project, selling WLFI tokens, with a target sales amount of 3 billion dollars.

WLFI is different from Memecoin TRUMP, at least according to its marketing, anyone who buys WLFI tokens can vote on business decisions like a traditional company shareholder. The ultimate plan is to operate in the form of a new type of internet bank, allowing customers to borrow and lend in various cryptocurrencies.

Trump is at the core of this publicity. The company has released a 13-page “Golden Book” describing its mission and leadership team. On the cover is a portrait of Trump, designed to look like it has been splattered with gold paint.

The report said that he will serve as the company’s ‘Chief Crypto Assets Advocate’.

When the WLFI plan is launched, the Trump family and its affiliated institutions will receive 22.5 billion WLFI coins, with a minimum face value of at least $1.1 billion as of now.

According to the company’s regulations, the Trump family and other WLFI investors are not allowed to sell their coins on the open market, but the company stated that this restriction may be lifted in the end if other token holders agree.

Initially, there were few buyers. As of the end of October last year, WLFI had only sold coins worth $2.7 million, far from its target.

Election day changed the situation.

A large number of investors are pouring in

As most of the United States ends its voting, Trump is about to win, and the WLFI account on X posted a celebratory message on November 5: ‘Something big is about to happen.’

Soon, a large amount of investment poured into the crypto assets of World Liberty.

Most cryptocurrency transactions are recorded on a public ledger called blockchain, and buyers and sellers are basically anonymous. However, World Liberty stated that it has conducted comprehensive reviews of its cryptocurrency investors and therefore knows their identities.

Blockchain data analytics company Nansen’s analysis for The Times based on data from the crypto industry shows that many investors reside in overseas areas such as Singapore, South Korea, Hong Kong, and the United Arab Emirates.

Federal law prohibits foreign nationals from contributing to presidential campaigns or inauguration funds, but the sale of WLFI provides a new, legal way to support Trump.

Keer Lau, Chief Strategic Officer of Hong Kong Orbiter Finance, said, “The main reason for buying this token is to support Trump’s inauguration, as he is the first US president friendly to crypto assets.”

Some companies managed by domestic and foreign investors have violated U.S. regulations. One of them is Israeli Yoni Assia, who founded the online trading platform eToro. Its U.S. subsidiary reached a $1.5 million settlement agreement with the U.S. Securities and Exchange Commission (SEC) last year for cryptocurrency-related violations. Puerto Rican investor Troy Murray also purchased World Liberty’s crypto assets. Previously, he helped create BarnBridge, which agreed to pay $1.7 million to the SEC at the end of 2023 to settle its own cryptocurrency-related charges.

Since Trump took office, some investors in World Liberty have been urging the government to obtain approval from regulatory agencies, or preparing to interact with the government as they seek to establish or expand their business in the United States.

In March this year, Asiya’s company notified the U.S. Securities and Exchange Commission (SEC) of its plan to go public in the United States. Crypto asset company DWF Labs, headquartered in the United Arab Emirates, announced this month that it has invested $25 million to acquire WLFI and will open an office in New York.

DWF Labs’ Managing Partner Andrei Grachev stated in an interview, “This transaction has increased our visibility in the United States. We hope to engage in direct dialogue with policymakers.”

At the end of last year, Sun Yuchen bought a banana taped to the wall for $620,000 at an art auction, attracting global attention. Shortly thereafter, Sun Zhengyi made another striking move: he spent $75 million to purchase WLFI tokens.

This investment has drawn widespread criticism from the community, as Justin Sun appears to be trying to please the Trump administration. During the Biden administration, the U.S. Securities and Exchange Commission (SEC) sued Justin Sun, accusing him of fraudulently inflating the price of Tron (TRX) coin.

Sun Yuchen denied the allegations of the U.S. Securities and Exchange Commission and stated in a text to The New York Times last year that his investment in WLFI was just a vote of confidence in the ‘excellent project’ of the Trump family.

At the end of February, the U.S. Securities and Exchange Commission asked a federal judge to pause the case against Justin Sun, stating that it is exploring ‘potential resolutions.’ The judge granted the request.

The stars sing together

Justin Sun has provided tremendous support to the World Freedom Organization. But Trump’s company wants more money. More.

Therefore, World Liberty’s executives quickly announced a plan they called a “transformative initiative,” to collaborate with and invest in other Crypto Assets institutions. The executives stated in February that the strategy would leverage World Liberty’s growing influence to assist those less well-known partners.

“It’s like taking care of your brother in space,” Chase Herro said at a cryptocurrency event held in New York that month.

But according to executives of several crypto asset startups who spoke to The New York Times, World Liberty’s public statement ignored a key aspect it privately pitched to several crypto asset startups. World Liberty wants to sell its own cryptocurrency, not just invest in others’. It proposed currency swaps.

According to executives from three cryptocurrency companies contacted by the company, the proposed transactions from World Liberty are as follows: these start-ups will invest 10 to 30 million US dollars to purchase a large amount of World Liberty’s cryptocurrency. In return, World Liberty will purchase a small amount of proprietary cryptocurrency from each start-up. The remaining funds will be owned by World Liberty - with a premium of up to 20%.

The acquisition of World Liberty will send a signal to the market: Trump’s company believes these startups are worth investing in. However, the market cannot know whether World Liberty has been rewarded for this endorsement. Industry news media Blockworks has previously reported some details of similar promotions by World Liberty.

“They’ve always told us that we feel very close to Trump” Mike Silagadze, CEO of Ether.Fi, a crypto asset startup contacted by World Liberty, said.

“We immediately rejected,” said Dominik Schiener, founder of the IOTA Foundation based in Berlin. The foundation also received the proposal and stated, “This is a very dishonest practice.”

Spokesman Walksman of the World Free Organization stated in a declaration that “The New York Times” report “fundamentally misunderstands industry standard practices” and that the company’s business arrangements “are not only common in the blockchain industry, but also crucial for establishing enduring economic alliances in the commercial field”.

He added, “These arrangements establish relationships of interest for all parties.”

The Times found that the benefits of the partnership are enough to attract at least five cryptocurrency companies to enter into other transactions with World Liberty without disclosing the details of the financial arrangements.

In a deal, the U.S.-based Sui Foundation announced that World Liberty will purchase an unspecified amount of Crypto Assets, causing Sui’s price to rise by more than 10%. Two insiders revealed that as part of the agreement, the Foundation will receive World Liberty’s Crypto Assets in return. Due to the private nature of the negotiations, the two insiders requested anonymity.

Other cooperation projects of the World Freedom Foundation also show how Trump integrates his public office with business activities. Last December, the company announced that it would use technology designed by Ethena Labs, a Lisbon-based startup. The company also purchased over $5 million worth of Ethena cryptocurrency.

One of Ethena’s investors is crypto entrepreneur Arthur Hayes, who admitted to violating the Bank Secrecy Act in 2022 and was sentenced to six months of home confinement. Last month, Trump pardoned Arthur Hayes. (Spokespersons for Ethena and Hayes declined to comment.)

Another partner of World Liberty is Ondo Finance, a startup based in New York, backed by conservative billionaire Peter Thiel’s venture capital firm Founders Fund.

World Liberty first purchased Ondo tokens in December, buying over 130,000 coins. This transaction at least temporarily boosted the price of Ondo tokens and became the headline news on major cryptocurrency news websites, all praising World Liberty’s move.

In January this year, Wong donated $1 million for Trump’s inauguration ceremony, ensuring an invitation to the candlelight dinner held at the National Building Museum in Washington, D.C., with several nominees for Trump’s cabinet on the guest list. Wong also sponsored an inauguration event called ‘Crypto Ball.’ Shortly after, Donald John Trump and the management team of World Liberty became the headliners of a conference organized in New York.

“We were not sure if this moment would happen before,” Ondo Chief Strategy Officer Ian De Bode said on stage. “But sometimes, things just fall into place.”

“Thank me later”

In February this year, Eric Trump conveyed some investment advice to his fans on X: ‘In my opinion, now is a good time to buy Ethereum.’

The stock symbol for the cryptocurrency called ‘Ethereum’. ‘You’ll thank me later,’ he added, then deleted the sentence.

The fact is, his advice has proven to be very visionary.

The following month, Trump announced the establishment of the ‘American Crypto Assets Reserve Center’, a cryptocurrency storage facility similar to Knox Castle, aimed at supporting the industry.

Trump’s statement listed a list of digital currency to be included in the reserve. In addition to Bitcoin, he will also include Ethereum, calling it the “core of the reserve”.

Ethereum price soared more than 13%.

World Liberty directly benefited from this surge. According to the crypto data firm Arkham, the company has purchased $240 million worth of Ethereum in the past few months.

On the day the president announced the crypto asset reserves, assuming World Liberty did not sell any of its held Ethereum, its value increased by 33 million US dollars. However, with the decline in Ethereum value, this part of the profit also evaporated.

The same pattern reappeared in March. Trump issued policy statements or released information that intersected with World Liberty’s commercial interests.

In a video of the cryptocurrency conference held in New York, Trump called on Congress to pass legislation to regulate stable coins, which are a type of cryptocurrency designed to maintain the value of 1 US dollar.

The Senate and the House of Representatives have both proposed bills aimed at making it easier for companies issuing stable coins to operate in the United States. Trump said in a speech last month that the rise of stable coins will “expand the dominance of the dollar”.

A week later, World Liberty announced the launch of its stablecoin USD1. “The future is here, and it’s bright!” Zach Witkoff wrote on X.

Jordi Alexander is a cryptocurrency executive who has helped World Liberty develop a plan to launch a stablecoin. In an interview, he stated that the company has received commitments of at least $1 billion from investors, who will purchase once the stablecoin is launched.

This new company will only exacerbate the moral conflict of World Liberty. The company plans to provide stable coins on the platform developed by Binance. This week, Zachary Folkman, Chase Herro, and Zach Witkoff met with Binance founder and former CEO Changpeng Zhao in Abu Dhabi.

According to sources, Zhao Changpeng has been serving a four-month sentence in federal prison for money laundering and has been seeking pardon from the Trump administration. Due to the sensitive nature of the topic, the sources requested anonymity.

Trump’s policy statement overlapping with his business interests has shocked Democratic members of Congress, who recently took action to amend pending stablecoin legislation to prohibit the Trump family from enacting the stablecoin bill.

The amendment did not pass, but any concerns about World Liberty have not derailed its momentum.

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