Trump-Linked Crypto Scheme WLFI Tanks After $150M Borrowing Sparks Alarm

World Liberty Financial (WLFI), a cryptocurrency project linked to Donald Trump’s family, has crashed to an all-time low, shedding more than 85% of its value since last September. The token’s recent nosedive follows alarming reports that the WLFI team borrowed roughly $150 million in USD Coin (USDC) by putting up nearly $400 million worth of their own WLFI tokens as collateral on a decentralized lending platform called Dolomite.

Arkham Intelligence’s analysis revealed that two wallets connected to the WLFI team supplied over $406 million in WLFI tokens to Dolomite, accounting for nearly 5% of the total token supply and almost all of the WLFI collateral on the platform. This massive self-collateralization allowed the team to borrow stablecoins against their own tokens, a tactic WLFI describes as a way to generate yield for users.

WLFI insists these borrowing positions remain “well above liquidation thresholds” and that they can post additional collateral if market volatility threatens their standing. They claim this strategy is central to their ecosystem’s function and dismiss critics’ concerns as mere “fear, uncertainty, and doubt” or “FUD.”

But this maneuver reeks of pay-to-play financial engineering, where the Trump family’s crypto venture leverages its own tokens to borrow large sums, potentially inflating value and creating a precarious bubble. Given the Trump administration’s history of self-enrichment and opaque financial dealings, WLFI’s collapse and borrowing tactics raise urgent questions about regulatory oversight and the risks posed to investors.

As the WLFI token spirals downward, retail investors remain bullish and chatter around the token stays high, signaling a disconnect between the project’s fundamentals and its community’s optimism. This episode adds another chapter to the Trump family’s pattern of exploiting political power for financial gain, now extending into the wild west of crypto markets.

Only Clowns Are Orange will continue to monitor WLFI and other Trump-linked ventures for signs of corruption, grift, and abuse of power in the crypto space. Stay tuned for updates on this unfolding story.