Trump-Backed World Liberty Financial Crypto Token Crashes Amid Insider Loan Scandal

World Liberty Financial, the crypto platform founded by Donald Trump’s family in 2024, is facing a crisis as its native token WLFI hit an all-time low of $0.08 on Friday—down roughly 82% from last September’s $0.46 peak. The steep drop came after reports surfaced that Corey Caplan, World Liberty’s CTO and co-founder of a third-party lending platform, used the company’s WLFI token reserves to make loans on that very platform, Dolomite.

Blockchain data reveals that World Liberty Financial lent out hundreds of millions of dollars worth of WLFI tokens to Dolomite, a relatively obscure decentralized lending platform ranked just 13th in size. In exchange, World Liberty borrowed stablecoins, but this risky financial juggling act has investors spooked. When CoinDesk broke the story Thursday, WLFI’s price immediately tumbled nearly 15%.

Crypto analysts warn this insider loan scheme poses a grave risk to WLFI’s value. Nicolas Vaiman, CEO of crypto analytics firm Bubblemaps, told Fortune that about 5% of WLFI’s total supply is now collateral on Dolomite. If WLFI’s price drops further, forced liquidation of that collateral could trigger a downward spiral as World Liberty would have to offload tokens to repay loans, pushing the price even lower.

World Liberty Financial tried to calm markets via social media, calling itself the “anchor borrower” and claiming its loans generate yield that benefits all WLFI holders. The company insisted its positions are “nowhere near liquidation” and promised to supply more collateral if needed. But these reassurances ring hollow given the scale of the loans and the shaky platform involved.

Adding to investor unease, Nasdaq-listed Alt5 Sigma and other institutional buyers like Point72 and ExodusPoint have sunk billions into WLFI tokens. Meanwhile, World Liberty’s massive borrowing of its own USD1 stablecoin on Dolomite has nearly exhausted the platform’s liquidity, potentially causing withdrawal issues for users.

This episode exposes the Trump family’s crypto venture as a high-risk, pay-to-play operation that uses insider deals and opaque financial engineering to prop up token prices and enrich insiders. As WLFI’s value collapses, retail investors and institutional backers alike face mounting losses while World Liberty’s leadership doubles down on a reckless gamble.

The WLFI crash and insider loan scandal are yet another chapter in the Trump administration’s pattern of corruption and self-dealing — this time playing out in the unregulated world of cryptocurrency. We’ll keep tracking this story as it develops and hold those responsible accountable.