A new crisis has erupted in crypto startups bearing the Trump family's name. Family-linked World Liberty Financial (WLFI) took action to stop a cryptocurrency wallet using the “Trump” name. Bloomberg reported on June 6 that WLFI sent a cease-and-desist letter to Fight Fight Fight LLC, demanding that they cease and desist the venture.
Trump family takes action against unauthorized wallet
According to Bloomberg, WLFI sent a cease-and-desist letter to Fight Fight Fight LLC. The wallet was announced in collaboration with NFT platform Magic Eden, but did not receive any approval from the Trump family or the Trump Organization. Social media accounts promoting the project were quickly deleted, while WLFI's swift response made it clear that the project had no “official” ties.
“The Trump Organization has nothing to do with this wallet,” Trump's eldest son Donald Trump Jr. said on social media on June 3, announcing that WLFI would soon introduce its own official wallet project. Eric and Barron Trump have similarly distanced themselves from the project.
However, the wallet crisis has not only had legal but also economic repercussions. Following WLFI's cease-and-desist letter, the $TRUMP token, which was launched as a meme coin, lost 11% of its market capitalization to approximately $130 million. The token started trading at $9.61 after the news. However, trading volume increased 129% to more than $713 million.
Fight Fight Fight LLC, the company behind the project, is best known for launching the $TRUMP token at the beginning of the year. The company is headed by Bill Zanker, a longtime friend of Trump. Zanker has previously authored Trump-themed NFT collectibles and has been at the forefront of many of Trump's digital asset projects. WLFI's “official” crypto projects include a USD1 stablecoin pegged to the US dollar and special event rewards.
How is WLFI doing?
As of March, WLFI had raised approximately $550 million through two public token sales. The platform has come under closer scrutiny after launching its USD1 stablecoin in May. An Abu Dhabi-based company announced plans to use the stablecoin to pay for a $2 billion investment in Binance. The Trump family holds a stake in WLFI and indirectly profits from the platform's transaction fees through a company affiliated with the US president.
As we previously reported, some Democratic members of the House of Representatives and Senate have accused Trump of using his presidential position to profit financially from crypto ventures.
These allegations have the potential to slow or completely halt the progress of digital asset-related bills in Congress. Bills to create a market structure framework for digital assets and regulate payment stablecoins are currently pending in the House and Senate.
