Secret Deals, Foreign Investments, Presidential Policy Changes: The Rise of Trump's Crypto Firm

A few days before President Trump's inauguration, a promotion for “ZMoney” appeared on the encrypted messaging app Signal.

A few days before President Trump’s inauguration, a promotion for “ZMoney” appeared on the encrypted messaging app Signal.

“ZMoney” refers to Zachary Folkman, an entrepreneur who previously ran a dating app company called Date Hotter Girls and currently serves as a representative for WLFI. Zachary Folkman was writing to a cryptocurrency startup in the Cayman Islands proposing a “partnership” in which both parties would buy each other’s digital currency, a deal that would boost the startup’s public profile.

But the startup would also secretly pay millions of dollars to the Trump family for the privilege of working with them, as The New York Times discovered.

“We get a ton of exposure and credibility for everything we do,” Zachary Folkman wrote, adding that other business partners have pledged donations of $10 million to $30 million to the venture, which is majority-owned by Trump family business entities.

The startup, which was not named, ultimately rejected the proposal as did several other companies that received similar offers from WLFI. They considered the deal unethical and argued that the company was essentially selling traffic generated by its political endorsements and hiding this from the public.

Undeterred, WLFI executives, who maintained they had done nothing wrong, successfully marketed similar deals to other companies and sold billions of WLFI tokens to buyers around the world, ultimately generating more than $550 million in sales, a large portion of which will be distributed to the president’s family.

Trump's return to the White House has opened up new ways for him to profit from his power, whether through his social media companies or new overseas real estate deals. But none of the Trump family’s other business ventures pose a greater conflict of interest than the series of related deals that stemmed from the creation of WLFI.

Primarily owned by Trump family business entities, WLFI has shattered centuries-old societal norms about the presidency, blurring the lines between private enterprise and government policy in a manner unprecedented in modern American history.

In addition to being a major cryptocurrency trader, Trump is also the industry’s top policymaker. So far in his second term, Trump has used his presidential might to benefit the cryptocurrency domain. While he has spoken disparagingly of cryptocurrencies for years as a haven for narcotics dealers and swindlers, he has consistently permitted his companies to profit from cryptocurrencies.

The Trump administration has included those sympathetic to the cause, such as appointing a cryptocurrency industry adviser as chairman of the Securities and Exchange Commission, and the Justice Department recently disbanded a cryptocurrency crime task force, continuing a general easing of Biden-era scrutiny of the industry.

A New York Times investigation into the rapid rise of WLFI from startup to international force and Trump's transformation from cryptocurrency skeptic to industry supporter highlighted a host of conflicts of interest at the company:

* WLFI directly benefited from actions by the Trump administration, such as his announcement of a federal cryptocurrency reserve that would include digital currencies in which WLFI invested. The president’s announcement led to a temporary increase in the value of assets held by the company.

* WLFI has sold its cryptocurrency to overseas investors, including in Israel and Hong Kong, according to interviews and data obtained by The New York Times, opening a new way for foreign companies to curry favor with Trump.

* Several investors in the company’s cryptocurrency management company have been accused of wrongdoing by the federal government. They include an executive whose alleged fraud case was suspended after he invested millions of dollars in WLFI. Other investors and business partners are seeking to expand their businesses, which would require approval from the Trump administration.

Over the course of several months, reporters interviewed more than two dozen people involved in the cryptocurrency industry and examined a vast trove of data, including blockchain transactions and internal company documents. Their investigation revealed that the company, which is named World Liberty Financial and trades under the ticker symbol WLFI, had sold more than 550 million of its tokens since its launch last year.

The company, which is organized as a limited liability corporation, is majority-owned by Trump-affiliated business entities and will receive 75% of the proceeds from the token sale, which can be converted into cash, according to its website.

“It’s one of the most successful things we’ve ever done,” Eric Trump, the president’s son who oversees the family business, said in an interview this month at Trump Doral Golf Links in Florida.

He and his brother, Donald Trump Jr., are actively involved in the company, though they rely on three partners to oversee its day-to-day operations. Two of them, Zachary Folkman and Chase Herro, have checkered pasts in the cryptocurrency space. The other is Zach Witkoff, the son of Steve Witkoff, the U.S. envoy to the Middle East on Trump's team, and one of the founders of WLFI.

In recent days, Zach, father Steve, and the partners met with Prime Minister Muhammad She