Trump's New Crypto Coin Is a Raw Deal for Investors

For starters, not just anyone can buy the WLFI tokens issued by World Liberty Financial, for which Trump is the chief crypto advocate.

Former President Donald Trump is now the chief crypto advocate for a company called World Liberty Financial, which is offering a cryptocurrency called $WLFI tokens.

But there’s a catch: Only accredited investors can buy the coins, which are priced at 1.5 cents each and named after Trump himself. To qualify, investors generally must have a net worth of at least $1 million, not including the value of their home.

World Liberty is offering the tokens under a Regulation D exemption from having to register them with the Securities and Exchange Commission. The company says it doesn’t consider the tokens to be securities.

Accredited investors can’t sell the coins, either. ‘All $WLFI will be non-transferable and locked indefinitely in a wallet or smart contract,’ according to a document released by World Liberty on Thursday.

In contrast, shares of Trump Media (DWAC) are changing hands constantly, contributing to the wild price fluctuations seen as recently as this past Tuesday. Shares dropped by as much as 16% in intraday trading, then surged to a 13% gain and finally closed down 10%.

The 13-page “gold paper” about the WLFI token also reveals that while Trump has no ownership stake in World Liberty, 22.5 billion WLFI tokens and 75% of its revenue go to DT Marks DEFI LLC, a Delaware entity whose owners and principals include him. In exchange, they will promote World Liberty and grant rights to use their name, image, and likeness.

The paper also explains there are 100 billion total coins, with 35 billion of them eventually being sold to ‘eligible participants.’ That means another 15 billion could come on the market later, possibly at a different price.

Trump’s crypto plan extends well beyond the new coin. At a Bitcoin conference over the summer, he said he wants the U.S. to create a strategic reserve of Bitcoin (CRYPTO: BTC).

Trump’s rival Kamala Harris has touted crypto as well, proposing a new regulatory framework that she says will better protect owners of digital coins and other digital assets.

The candidates’ vocal support for crypto dovetails with an increase in donations to political action committees aimed at getting pro-crypto candidates elected, regardless of their political affiliation, according to an August report from Public Citizen. Nearly half of all corporate money going toward influencing the election is coming from crypto firms, with the crypto exchange Coinbase (NASDAQ:COIN) and payment network Ripple as the biggest backers.