- A draft white paper reveals that 70% of World Liberty Financial’s governance tokens, WLFI, are reserved for insiders, contradicting the platform’s public message of empowering everyday people.
- WLFI tokens will be non-transferable until regulatory clarity is achieved, locking them indefinitely in smart contracts to avoid potential legal issues.
World Liberty Financial, a blockchain project heavily endorsed by former U.S. President Donald Trump and his sons, has come under scrutiny following the leak of a draft white paper that reveals a controversial token allocation strategy. Despite being marketed as a tool to revolutionize finance and empower everyday individuals, the draft document shows that 70% of the platform’s governance tokens, WLFI, are reserved for insiders. This group includes founders, team members, and service providers, raising questions about the project’s true commitment to public participation.
The allocation strategy outlined in the draft starkly contrasts with the principles promoted by World Liberty Financial. Marketed as a solution to what the Trump family has called a “rigged” traditional financial system, the platform aims to position itself as a game-changer in the crypto world. However, the proposed token distribution reveals a concentration of control that could undermine the very ideals it claims to champion.
The draft white paper details that only 30% of WLFI tokens will be available for public sale. Even within this allocation, a significant portion of the funds raised will be redirected back to project insiders, while the remainder will be held in a treasury for operational support. This model deviates significantly from other prominent blockchain projects; for example, Ethereum allocated approximately 16.6% of its initial supply to early contributors, and Cardano reserved 20% of its tokens for insiders.
In comparison, Bitcoin’s creator, Satoshi Nakamoto, is estimated to hold just 5% of its total supply. The heavy insider focus of World Liberty Financial’s model has been criticized within the crypto community, with some experts dismissing it as a “joke.”
Adding to the complexity, WLFI tokens will be non-transferable until regulatory clarity is achieved. According to the draft white paper, these tokens will remain locked in a wallet or smart contract indefinitely, ensuring they cannot be traded or transferred among users. This decision aims to comply with securities laws and avoid potential violations.
Any future transferability of the tokens would depend on governance procedures that adhere to legal requirements. Additionally, purchasers of WLFI will be subject to screenings to ensure compliance with regulatory standards, including checks to confirm they are not on international sanctions lists.
However, the document’s reference to FinCEN, rather than the Office of Foreign Assets Control (OFAC), suggests potential oversights in the project’s compliance measures. Such errors could complicate the project’s legal standing and raise further questions about its overall preparedness.
World Liberty Financial’s high-profile promotion has also made it a target for fraudsters and hackers. Recently, social media accounts belonging to Lara Trump and Tiffany Trump were compromised and used to promote a fraudulent crypto token falsely associated with the project. This incident highlights the risks surrounding the platform and underscores the need for greater vigilance as World Liberty Financial moves forward.
The project’s insider-favored tokenomics and its regulatory uncertainties paint a complex picture that diverges from its public image, raising critical questions about its future and its true dedication to financial empowerment.