11 October 2024

Trump's Vision for the US as the 'Crypto Capital of the World' Raises Concerns Among Allies

Trump's ambition for the US to become the 'crypto capital of the world' raises concerns among allies and experts in the cryptocurrency industry.

Trump's Vision for the US as the 'Crypto Capital of the World' Raises Concerns Among Allies

In the wake of legal troubles related to civil fraud involving his family business, Donald Trump has ignited fresh apprehensions with his burgeoning interest in cryptocurrency. The former president, who is currently a Republican presidential candidate, has reportedly invested over $1 million in digital currencies and is exploring the launch of a new crypto venture alongside his sons, Don Jr. and Eric, named World Liberty Financial.

However, this initiative has raised alarms among Trump's allies within the cryptocurrency community. Recently, the X accounts of Tiffany Trump, Trump's youngest daughter, and Lara Trump, Eric's wife and co-chair of the Republican National Committee, were hacked. The hackers used their accounts to post misleading links related to the World Liberty Financial project, prompting the company to issue warnings to users to avoid these fraudulent links.

In response to the hacking incident, Nic Carter, a Trump supporter and general partner at Castle Island Ventures, publicly advised the Trump family to halt the startup's progress. He expressed concerns on X, stating, "Is there something that we, as crypto Twitter, can collectively do to stop the launch of World Liberty Coin? I think it genuinely damages Trump’s electoral prospects, especially if it gets hacked... it’s also an obvious target for the SEC."

Carter further described the venture as a “huge mistake,” suggesting that it appears the Trump family is attempting to capitalize on Trump's newfound crypto enthusiasm without fully understanding the complexities of the industry. He warned that the initiative could jeopardize the goodwill that has been cultivated within the crypto community.

The hacking incidents coincided with the Trump family's promotional efforts for World Liberty Financial. Trump himself shared a video on his X account, expressing his ambition for the United States to become “the crypto capital of the planet.” Despite being relatively new to the platform, World Liberty Financial has already amassed over 50,000 followers.

Experts have voiced concerns regarding the premature promotion of the project. Austin Campbell, a blockchain expert and adjunct professor at NYU Stern School of Business, noted that the strategy of generating hype before revealing substantial details is often characteristic of less experienced operators in the crypto space, making them vulnerable to various pitfalls.

An anonymous insider from the cryptocurrency sector shared that there are numerous concerns about how World Liberty Financial could potentially tarnish the industry's reputation.

Trump's relationship with cryptocurrency has shifted dramatically over the years. After his presidency, he labeled Bitcoin a “scam,” citing concerns about it competing with the US dollar. However, in recent months, he has embraced cryptocurrency, with his campaign announcing plans to accept crypto contributions as part of a strategy to build a “crypto army” ahead of the upcoming elections.

While official details about World Liberty Financial remain scarce, CoinDesk has obtained excerpts from a white paper that describes the project as a borrowing and lending service similar to Dough Finance, which suffered a $2 million hack in July. Notably, several individuals involved in Dough Finance are also listed as team members for World Liberty Financial, including all of Trump’s sons, with Barron Trump being referred to as a “DeFi visionary.”

The startup plans to introduce a non-transferable governance token, but the white paper reveals that 70% of the tokens will be retained by the founders, team, and service providers, raising questions about its decentralized claims. Despite the recent security breaches, a spokesperson for World Liberty Financial assured Politico, "We take security very seriously and put it first and foremost, above anything."

Source: The Independent