Trump family cashes in on $500 million crypto deal through World Liberty and Alt5

The Trump family has pulled off a crypto deal worth more than $500 million, with their own companies sitting on both ends of the transaction. According to The Wall Street Journal, the former real estate dynasty now makes most of its money from crypto.

At the center of the operation is World Liberty Financial, the private firm Donald Trump launched last year. Earlier this month, World Liberty took over a small payments company called Alt5 Sigma, which had only recently stopped selling pain medication and started working in crypto.

After the acquisition, Alt5 raised $750 million from outside investors. The company then used that money to buy WLFI tokens, the crypto World Liberty invented just last year.

This setup means the Trump family sold its own token to a company it controls. That purchase sends three-quarters of WLFI revenue straight back to a Trump-owned entity, setting up a payday of at least half a billion dollars.

Trump sons take control as World Liberty installs new leadership

The deal gave World Liberty direct influence over Alt5. Zach Witkoff, World Liberty’s co-founder and CEO, became chairman of Alt5. Eric Trump joined the board.

A new chief investment officer was also picked by World Liberty, a crypto founder focused on pushing their stablecoin, USD1. Witkoff and Eric rang the opening bell at Nasdaq on August 13 to celebrate. Witkoff, whose father is Donald Trump’s special envoy Steve Witkoff, gave a speech representing both companies.

Alt5’s plan is to build up a treasury of WLFI, using a strategy modeled on Strategy (the rebranded MicroStrategy), which used equity to buy Bitcoin. But there’s one key difference: Strategy bought assets on the open market.

Alt5 is buying WLFI directly from World Liberty, which created it and controls its supply. Alt5 paid $0.20 per token, a 50% markup from a recent private sale, but Witkoff said that was still cheaper than WLFI futures prices trading on crypto exchanges.

These circular deals, where the same people are running both ends, are common in crypto but would’ve raised red flags in traditional finance. Still, multiple former regulators reportedly said that as long as everything was disclosed to investors, it likely fits within securities law.

WLFI trading debut to test Trump family’s crypto empire

WLFI is scheduled to begin trading Monday, the equivalent of a crypto IPO. World Liberty will release only a small amount to public markets. Most of the 33 billion tokens it holds won’t be available immediately, and some early investors can’t sell yet.

Based on disclosures and exchange data, the Trump family holds WLFI valued at over $6 billion, with President Trump personally controlling about two-thirds of that.

If WLFI gains value, the Trump family stands to earn billions more, not just from the tokens they hold, but also from future sales. But nothing is guaranteed. Earlier Trump-themed coins soared at launch and later crashed. Big holders trying to sell even small amounts could drag prices down.

World Liberty started selling WLFI privately last year and raised $650 million. One investor was Justin Sun, the Chinese billionaire behind Tron. WLFI doesn’t give holders profits but allows them to vote on some company matters.

World Liberty’s other crypto product, USD1, is a stablecoin pegged to the dollar. They plan to launch a mobile app soon, using Alt5’s e-commerce tools to scale it up.

Until mid-2023, Alt5 wasn’t even in the crypto space. It operated as JanOne, focused on recycling and pain meds. In May, JanOne paid a fine to settle SEC allegations that it had inflated earnings. That same month, it bought a crypto firm named Alt5 Sigma and changed its name. World Liberty later bought shares in Alt5 using WLFI tokens and took control.

Now, World Liberty plans to use USD1 profits to buy more WLFI, copying the logic of a stock buyback. President Trump also owns large positions in other crypto assets. He holds several billion dollars in $Trump coin, a memecoin, and in Trump Media, which runs Truth Social and holds crypto.

White House Press Secretary Karoline Leavitt have claimed that: “Neither the president nor his family have ever engaged, or will ever engage, in conflicts of interest.”

Alt5’s funding round brought in major backers. Steve Cohen’s Point72 put up capital. So did Soul Ventures, a Hong Kong-based firm that invested $85 million. Warren Hui, Soul Ventures’ co-founder, said they’re betting on the team behind World Liberty. “They are launching their product at the right time with the right team,” Hui said, calling Alt5’s purchase price “fair.”

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