Author: Stephanie Bedard-Chateauneuf

As Donald Trump eyes a potential return to the White House, his involvement in a new cryptocurrency venture called World Liberty Financial (WLFI) is raising eyebrows. Promoted as a decentralized finance platform, WLFI claims to “put the power of finance back in the hands of the people.” However, critics suggest that the Trump crypto venture is less about decentralization and more about financial gains for Trump and his family.

Let’s take a deeper look at the role of Trump and his family in this crypto project, the controversy surrounding it, and whether WLFI is truly about decentralization or just another moneymaking scheme.

Trump Family’s Involvement in WLFI

The Trump family’s association with World Liberty Financial is both direct and deep. Donald Trump serves as the “Chief Crypto Advocate” for the platform, while his sons, Eric Trump and Donald Trump Jr., hold roles as “Web 3 Ambassadors.” Even Trump’s youngest son, Barron Trump, is involved in the venture as a “DeFi Visionary,” despite still being a college freshman at New York University. According to a draft of the company’s white papers, obtained by CoinDesk, the Trump family is heavily embedded in the project’s inception and ongoing promotion.

While the company has attempted to publicly distance itself from the Trumps in any formal capacity, it’s clear that their involvement is central to the platform’s identity. Recently, Trump posted about World Liberty Financial on social media, positioning the U.S. as the future “crypto capital of the planet,” using typical campaign-style rhetoric to promote the venture.

Is WLFI a Decentralized Financial Platform?

World Liberty Financial presents itself as a decentralized finance (DeFi) solution to what it claims is a “rigged” financial system. Its goal, according to posts on X (formerly Twitter), is to drive the mass adoption of stablecoins and decentralized finance. WLFI promises to give power back to the people, but a closer examination of its tokenomics raises questions.

Seventy percent of WLFI’s governance tokens—tokens that typically grant holders voting rights over a project’s direction—are being reserved for insiders. This leaves just 30% of the tokens available for public purchase. Such a skewed distribution is highly unusual in the world of DeFi, where token governance is supposed to promote transparency and democratic decision-making. Critics, including CoinDesk, suggest that the token distribution signals a potential cash grab by the Trump family.

Further complicating the matter, WLFI’s governance tokens are set to be “locked indefinitely” to avoid scrutiny from the Securities and Exchange Commission (SEC). However, there is speculation that should Trump win the 2024 presidential election, he could appoint a crypto-friendly SEC chair to replace Gary Gensler, whom Trump has pledged to fire. This scenario could allow the Trump family to unlock their shares without facing regulatory hurdles.

Concerns About Security and Transparency

While WLFI markets itself as a game-changer in decentralized finance, there are significant concerns about its security and transparency. Last week, both Lara and Tiffany Trump’s X accounts were hacked and used to promote a crypto scam that closely resembled World Liberty Financial. This incident raised questions about WLFI’s own security practices and whether the platform could be vulnerable to similar attacks.

Moreover, the founder of WLFI, Zak Folkman, previously ran a lending app called Dough Finance, which was hacked in July, leading to losses of more than $2 million for its customers. Some have pointed out that parts of WLFI’s code may have been copied directly from the defunct Dough Finance, raising further concerns about the platform’s legitimacy and safety.

Political Implications of WLFI

What sets Trump’s crypto venture apart from other cryptocurrency projects is its deep connection to Trump’s political ambitions. Should Trump regain the presidency, he would be in a position to influence crypto regulation in ways that could directly benefit World Liberty Financial and its insider-heavy token holders. This could allow Trump and his family to profit from WLFI while circumventing potential legal obstacles.

Already, WLFI’s ties to the Trump family have attracted scrutiny. While Trump and his sons promote the project with claims of returning financial control to the people, the insider-heavy structure suggests that the Trumps themselves could be the primary beneficiaries of this venture.

Conclusion: Cash Grab or Legitimate DeFi Platform?

While Trump’s crypto venture presents itself as a bold initiative in decentralized finance, the details surrounding World Liberty Financial raise red flags. With the Trump family deeply involved in both its promotion and potential financial benefits, many critics argue that this is less about decentralizing finance and more about consolidating wealth within the Trump family.

The platform’s reliance on insider-held governance tokens, questionable security practices, and political connections complicate its image. For those considering investing in WLFI, it’s worth approaching this venture with caution, as it may be more about enriching its insiders than truly revolutionizing the financial system.

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Stocks tied to Bitcoin exposure saw a notable recovery this week as Bitcoin (BTCUSD) managed to pare some of the losses it suffered on Friday. The crypto stocks recovery was fueled by Bitcoin’s resurgence above $56,000 after dropping to around $52,600 last week. Despite this rebound, Bitcoin still remains below its highs from earlier in the week, but the upward trend has breathed life back into cryptocurrency-related stocks.

Shares of companies with significant exposure to Bitcoin, including Coinbase Global Inc.(NASDAQ:COIN) and MicroStrategy Inc. (NASDAQ:MSTR), saw gains as the cryptocurrency market rebounded. While the stocks have yet to reach last week’s highs, the recovery in Bitcoin’s price helped lift investor sentiment across the sector.

Bitcoin’s Bounce Lifts Coinbase and MicroStrategy

Coinbase, the largest cryptocurrency exchange in the U.S., saw its stock rise 4% on Monday as Bitcoin prices recovered. The company’s performance is closely tied to the price of Bitcoin, as its trading volume and revenues are highly dependent on cryptocurrency market activity. The recent uptick in Bitcoin prices indicates renewed interest from traders and investors, driving higher engagement on Coinbase’s platform.

Similarly, MicroStrategy, which is well-known for holding significant amounts of Bitcoin on its balance sheet, surged by 8% on Monday. The company, which is primarily a software firm, has become closely associated with Bitcoin due to its large holdings of the cryptocurrency. As Bitcoin’s price fluctuates, so too does the value of MicroStrategy’s stock, and Monday’s recovery provided a boost to the company’s shares. However, both Coinbase and MicroStrategy are still trading below the levels they reached earlier in the week, indicating that the market remains cautious.

Bitcoin Mining Stocks Follow the Trend

The crypto stocks recovery extended to companies involved in Bitcoin mining, with shares of Cleanspark Inc. (NASDAQ:CLSK) and Marathon Digital Holdings Inc. (NASDAQ:MARA) also rising. Cleanspark’s stock increased by 5% on Monday afternoon, while Marathon Digital saw a more significant jump of 9%. Both companies are involved in the energy-intensive process of Bitcoin mining, meaning their fortunes are closely tied to the price of the cryptocurrency.

As Bitcoin prices fell on Friday, mining companies faced headwinds due to concerns over profitability. Mining Bitcoin becomes less lucrative when prices drop, particularly with the rising costs of energy. However, Monday’s price recovery helped allay some of those concerns, giving these stocks a much-needed boost.

Weaker Jobs Report Raises Questions for Riskier Assets

The recent fluctuations in Bitcoin prices—and by extension, crypto stocks—can be partially attributed to macroeconomic factors. A weaker-than-expected August jobs report released last Friday has renewed fears of an economic slowdown. The report showed slower job creation than anticipated, sparking uncertainty about the strength of the U.S. economy. This data has led some investors to shy away from riskier assets, including cryptocurrencies.

Bitcoin, often viewed as a high-risk asset, tends to be more sensitive to shifts in broader market sentiment. As investors processed the disappointing jobs report, many moved out of speculative assets, resulting in last week’s drop in Bitcoin prices. Monday’s recovery suggests that some of the initial fears have subsided, but it remains to be seen whether this upward momentum can be sustained.

Outlook for Crypto Stocks Moving Forward

While Monday’s crypto stocks recovery has provided a short-term boost to Bitcoin-related stocks, there is still considerable uncertainty in the market. Macroeconomic factors, such as inflation, interest rates, and employment data, will continue to play a significant role in determining the trajectory of both Bitcoin and the stocks tied to its performance.

For Coinbase, its near-term success will depend on continued trading volume growth, while MicroStrategy’s stock will remain heavily influenced by Bitcoin’s price fluctuations due to its large crypto holdings. Similarly, the fortunes of Cleanspark and Marathon Digital are intertwined with Bitcoin’s market price, and any significant downturn could affect their mining operations and profitability.

In conclusion, the recovery in crypto stocks like Coinbase, MicroStrategy, Cleanspark, and Marathon Digital reflects a broader rebound in the cryptocurrency market following last week’s downturn. However, the sector remains volatile, and investors should be cautious about the potential for further fluctuations based on macroeconomic conditions and Bitcoin’s inherent price volatility.

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Losses from cryptocurrency scams in 2023 surged by 45% compared to the previous year, according to a recent report from the FBI. The total losses amounted to more than $5.6 billion, driven by scammers who exploited the speed and irreversibility of digital asset transactions. With the rise in popularity of cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH), as well as the emergence of exchange-traded funds (ETFs) tracking their prices, the growth of the crypto market has attracted both legitimate investors and malicious actors.

Why Cryptocurrency Scams Are on the Rise

Cryptocurrencies have garnered significant attention in recent years, fueled by price surges and the increasing integration of digital currencies into mainstream finance. However, the rapid expansion of the market has also opened the door to more sophisticated fraud schemes. In 2023, the FBI’s Internet Crime Complaint Center reported that criminals are increasingly using cryptocurrencies to facilitate illicit activities such as theft, fraud, and money laundering.

Cryptocurrency transactions are recorded on publicly available blockchains, which should, in theory, allow law enforcement to trace the movement of funds. Despite this, the decentralized and global nature of digital currencies has made it difficult to recover funds once they are transferred overseas. Lax anti-money laundering laws in some jurisdictions create further challenges for U.S. authorities, making the recovery process slow and, in many cases, ineffective.

The FBI highlighted that the most significant category of cryptocurrency scams in 2023 stemmed from investment-related fraud. Investment scams involving cryptocurrencies accounted for 71% of all crypto-related losses last year. These scams often involve promising investors guaranteed returns on crypto assets or enticing individuals to invest in non-existent blockchain projects. Unfortunately, these schemes have led to massive financial losses for victims.

The Impact on Vulnerable Populations

One of the most alarming aspects of cryptocurrency scams in 2023 is the disproportionate impact on older adults. According to the FBI report, people over the age of 60 reported the highest number of complaints involving cryptocurrency fraud. In total, this age group suffered more than $1.6 billion in losses. Older adults are often targeted by scammers due to their unfamiliarity with digital assets and emerging technologies, making them more vulnerable to deceptive schemes.

Call center frauds and government impersonation scams were also significant contributors to the rising cryptocurrency-related losses. These types of scams typically involve criminals posing as government officials or customer service representatives, convincing victims to transfer funds under the guise of resolving a supposed issue with their crypto account or taxes.

The FBI emphasized that the ease with which scammers can access global markets, combined with the anonymity and speed of crypto transactions, has exacerbated the problem. Once funds are transferred, especially to foreign accounts, tracing and recovering them becomes a daunting task. These factors make digital currencies an attractive tool for cybercriminals.

Why Cryptocurrencies Are a Target for Scammers

The increasing use of digital currencies for criminal purposes can be attributed to several factors. First, cryptocurrencies eliminate the need for traditional financial intermediaries, such as banks, to validate and facilitate transactions. This decentralization, while empowering for users, also makes it easier for criminals to exploit the system for illicit activities.

Additionally, crypto transactions are typically irreversible, meaning that once a transfer is made, it cannot be undone. This characteristic is particularly appealing to scammers, as victims often have no recourse to recover their funds. Finally, the relative anonymity provided by cryptocurrency wallets, especially in jurisdictions with less stringent regulations, makes it difficult for law enforcement to track the identities of the criminals behind these schemes.

Protecting Yourself from Cryptocurrency Scams

As cryptocurrency scams become more prevalent, it’s crucial for investors to take proactive steps to protect themselves. Here are a few key precautions:

Verify the Legitimacy of Investment Opportunities: Always research any cryptocurrency investment opportunity thoroughly before committing funds. Look for verifiable track records, regulatory compliance, and clear information about the team behind the project.

Avoid Guaranteed Returns: Be wary of promises of guaranteed returns. Cryptocurrencies are highly volatile, and no legitimate investment can offer guaranteed profits.

Use Reputable Platforms: When trading or investing in digital assets, use well-established platforms with a solid reputation for security and regulatory compliance.

Be Cautious of Unsolicited Communications: If you receive unsolicited messages about a cryptocurrency investment opportunity, especially from someone claiming to represent a government agency or company, be skeptical.

Conclusion

The surge in cryptocurrency scams in 2023 highlights the dark side of the growing digital asset market. While cryptocurrencies offer numerous benefits for investors and users, they also present significant risks when it comes to fraud. As digital currencies continue to integrate into global financial systems, both investors and authorities must remain vigilant to combat the rise in crypto-related scams.

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A complex cryptocurrency scheme has led to a legal battle in British Columbia, leaving two men financially devastated. The case, centered around a loan of 22 bitcoins, has culminated in a B.C. Supreme Court judge ordering Daniel Tambosso to repay $1.2 million to Hung Nguyen. This ruling highlights the risks and legal complexities surrounding Bitcoin transactions, which can easily lead to financial ruin when things go awry.

Bitcoin Legal Battle Unfolds

The Bitcoin legal battle began when Hung Nguyen, a Kelowna real estate agent, lent 22 bitcoins to Daniel Tambosso in September 2021. This transaction, valued at $1.2 million, was intended to be a short-term loan, with repayment expected within 48 hours. However, the loan was never repaid, leading to a protracted legal dispute.

Nguyen claimed the borrowed bitcoins represented his entire life savings, and the failure to repay the loan had devastating consequences on his personal finances and mental health. The court documents reveal that Nguyen’s initial $264,000 investment in cryptocurrencies had grown to $1.18 million by 2021, making the loss even more significant.

Tambosso’s Defense: Victim of a Larger Scam

Tambosso, who plans to appeal the ruling, presented a defense that he was also a victim of a larger cryptocurrency scam. He claimed that the borrowed bitcoins were intended to recover his own misappropriated cryptocurrency, which had been locked in a blockchain wallet supposedly worth billions. According to Tambosso, the process of unlocking the wallet required payments in bitcoins at various stages, leading him to borrow from Nguyen.

Tambosso stated in his affidavit, “My intentions were genuine, with no desire to misappropriate his bitcoins. I had sought assistance from investors to recover my own bitcoins, only to uncover that it was a Ponzi scheme involving compromised and manipulated wallets, with bitcoins demanded within strict time frames, constantly requiring more.”

Court’s Ruling: A Simple Matter of Contract Law

Despite the complexities of the cryptocurrency scheme, Justice Shelley Fitzpatrick ruled that the case boiled down to a simple matter of contract law. The contracts between Nguyen and Tambosso were clear: Tambosso was required to repay the 22 bitcoins within 48 hours, regardless of whether his efforts to unlock the blockchain wallet succeeded.

Justice Fitzpatrick stated, “Although it appears to be, in hindsight, that Mr. Tambosso was either scammed or has otherwise become involved in some kind of broader nefarious scheme, neither absolve him of his obligations to repay Mr. Nguyen.”

The Role of Satoshi Nakamoto in the Case

Adding another layer of intrigue to the Bitcoin legal battle, Tambosso claimed that the security recovery software he used was purportedly designed by Satoshi Nakamoto, the pseudonymous figure often credited with creating Bitcoin. This connection to Nakamoto, a figure with “cult-like status” in the cryptocurrency world, added credibility to Tambosso’s proposition in Nguyen’s eyes. However, the judge made no conclusions about Nakamoto’s involvement or existence, focusing instead on the contractual obligations between the two men.

Financial and Emotional Fallout

The court’s ruling has left both parties financially ruined. Nguyen has been forced to refinance property to pay off debts accrued from his cryptocurrency investments. He wrote in his affidavit, “I regularly experience anxiety concerning the loss of my life savings.” Tambosso, who now works in heating, ventilation, and air conditioning, claims to have lost billions in the failed venture. “I lost everything in my entire life to this, and now I have to pay for it again?” he said.

Conclusion

The Bitcoin legal battle between Nguyen and Tambosso serves as a cautionary tale about the risks of cryptocurrency investments and the potential for financial ruin when transactions go wrong. As cryptocurrency continues to gain popularity, this case underscores the importance of understanding the legal implications and risks involved in such investments. For Nguyen and Tambosso, the aftermath of this failed Bitcoin deal has left them both grappling with the harsh realities of financial loss and legal consequences.

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In a bold new move, former President Donald Trump announced his ambitious plan to make the United States the “crypto capital of the planet” through the launch of a new crypto platform, World Liberty Financial. The announcement, made via a post on X (formerly Twitter), has sent ripples through the digital currency community and beyond as Trump doubles down on his pro-crypto stance ahead of the 2024 presidential election.

Trump Crypto Platform: World Liberty Financial

The newly rebranded platform, previously known as “The DeFiant Ones,” is now called World Liberty Financial. Trump introduced the platform to his 90 million followers on X, sharing a video in which he declared, “This afternoon, I’m laying out my plan to ensure that the United States will be the crypto capital of the planet. They want to choke you out of business. We’re not going to let that happen.”

Although the former president did not specify who he was referring to by “they,” his message clearly targeted those who oppose or regulate the crypto industry. Trump’s campaign spokesperson did not immediately clarify this statement, leaving room for speculation among supporters and critics alike.

The Role of the Trump Family in the Crypto Project

World Liberty Financial is a family affair, involving Trump’s sons, Donald Trump Jr. and Eric Trump. Both sons have been active in promoting the platform on social media. Eric Trump took to X to announce, “Excited to announce the launch of @WorldLibertyFi! A new era in finance is here,” while Donald Trump Jr. has spoken about the platform’s potential to rival traditional banking systems.

The platform’s Telegram channel, also renamed to World Liberty Financial, has seen a surge in subscribers, with over 52,000 members as of Thursday morning. The announcement came shortly after Trump launched a new round of NFT trading cards, another digital venture that has been intertwined with his political brand.

Trump’s Crypto Ambitions and Political Strategy

For Trump, the World Liberty Financial platform serves dual purposes: it strengthens his position as the pro-crypto candidate in the 2024 presidential race and provides a new avenue for attracting voters and donors from the crypto community. Trump has increasingly aligned himself with the crypto movement, delivering bullish statements about the industry and receiving significant donations and endorsements from the crypto voting bloc. According to the Trump campaign, they have raised $25 million from crypto-related sources, though this figure has not been independently verified.

Trump’s aggressive push into the crypto space is seen as an attempt to tap into a growing and influential community of digital currency enthusiasts who feel marginalized by traditional financial systems. By positioning himself as a champion of decentralized finance, Trump aims to solidify his base while attracting new supporters who are passionate about cryptocurrency.

Uncertainty Surrounding World Liberty Financial

Despite the fanfare surrounding the launch, details about the World Liberty Financial platform remain sparse. Neither Trump nor his sons have provided clear explanations of what the platform will offer or how it will function. Donald Trump Jr. hinted that the platform could disrupt the traditional banking system by providing decentralized finance solutions, particularly for those who have been “debanked.” Meanwhile, Eric Trump suggested that the project might involve digital real estate, potentially involving tokenized real-world assets or metaverse-related ventures.

The lack of specifics has left many wondering about the viability and scope of World Liberty Financial. As of now, it is unclear whether the platform is fully operational or still in development.

Conclusion

Trump’s unveiling of the World Liberty Financial platform marks his most significant foray into the crypto world yet. While the announcement has generated considerable excitement among his supporters, the lack of clarity about the platform’s functionality and purpose leaves many questions unanswered. As Trump continues to position himself as a pro-crypto candidate, the success of World Liberty Financial could play a crucial role in his political strategy and his efforts to make the United States the “crypto capital of the planet.”

The coming months will likely reveal more about this ambitious project and its potential impact on both the crypto industry and the 2024 presidential race.

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