Donald Trump’s foray into cryptocurrency is once again mired in controversy as a new report reveals that the key figures behind World Liberty Financial (WLFI) a Trump-backed crypto venture previously operated a failed and hacked crypto platform and failed to compensate its users.
Reuters Report Uncovers Shady Past of WLFI Founders
A Reuters investigation published on Monday, May 19, has brought to light troubling details about Zak Folkman and Chase Herro, two prominent figures behind WLFI. Before their involvement with WLFI, Folkman and Herro co-founded Dough Finance, a leveraged crypto trading platform that suffered a catastrophic $2.5 million hack in July 2024 due to a critical code vulnerability.
While the pair initially promised to reimburse affected users, they quickly moved on. Just two months after the hack, Folkman and Herro launched WLFI with Donald Trump’s sons—Donald Jr., Eric, and Barron Trump—as partners. The lack of restitution to Dough Finance users has sparked outrage, especially as WLFI has seen rapid growth and fundraising success since its launch.
Lawsuit and Investor Losses Raise Legal Questions
Adding to the scrutiny, Folkman and Herro are currently facing a lawsuit related to their handling of the Dough Finance collapse. One investor, Jonathan Lopez, reportedly lost $1 million worth of crypto during the platform’s exploit and is among those seeking restitution.
Despite these serious allegations, Eric Trump, executive vice president of WLFI, issued a public defense of the two partners.
“We are proud of the entire team. They have overachieved our wildest goals and our current trajectory is nothing short of incredible,” he said in a statement.
Justin Sun’s Involvement Adds Fuel to the Fire
The controversy does not stop with Dough Finance. In December 2024, Tron founder Justin Sun joined WLFI as an advisor after investing $30 million into the project. Sun has long been a polarizing figure in the crypto industry and was previously under SEC investigation for alleged violations related to BitTorrent and Rainberry token sales.
Curiously, the SEC dropped those investigations shortly after Sun’s involvement in WLFI, prompting Democratic lawmakers to call for a deeper investigation into Trump’s crypto-linked activities, alleging potential political interference and conflicts of interest.
Mounting Pressure on Trump’s Crypto Empire
This new wave of scrutiny follows broader questions about the legitimacy and motives behind Trump’s digital asset ventures. Critics suggest that projects like WLFI are being used as vehicles for personal enrichment rather than meaningful innovation in blockchain technology.
As WLFI’s profile continues to rise, regulatory pressure, legal action, and political backlash threaten to cast a long shadow over its future. With the 2024 Dough Finance hack still unresolved and WLFI leadership doubling down on its support of controversial figures, the Trump crypto empire may soon face its most significant reckoning yet.
