The Trump family is pursuing the sale of AI Financial, a cryptocurrency payments company it acquired a year ago. The Trump family used the company to sell its own cryptocurrency and profit from it. But as the value of the cryptocurrency plunged more than 70%, investors were left to absorb the losses. Criticism that U.S. President Donald Trump has used his office to enrich himself is expected to grow.
According to The Wall Street Journal on the 8th, AI Financial, a Nasdaq-listed company, is pursuing the sale of its core business to blockchain technology firm Perpetuals.com. The company was acquired a year ago by World Liberty, owned by the Trump family, for $750 million (about 1.13 trillion won). But the currently expected transaction price is around $15 million (about 22.6 billion won).
The sale represents a dramatic reversal for the company. Trump venture World Liberty Financial had promoted the company as key to becoming a major competitor in the industry. World Liberty had planned to grow an international payments business using a dollar-based stablecoin.
But AI Financial served as a conduit that funneled more than $500 million (about 750 billion won) to the Trump family. While investors took losses, the president's family pocketed cash. President Trump recently disclosed that he earned more than $1.4 billion (about 2.1 trillion won) from cryptocurrency last year.
World Liberty secured management control of AI Financial last August by paying with its own cryptocurrency. The company, then named Alt5, changed its name to AI Financial. The payments company then raised an additional $750 million from investors to buy more of World Liberty's digital token, "WLFI."
Through this deal, AI Financial ended up holding a massive amount of Trump cryptocurrency. The value of WLFI subsequently plunged 70%, and some is subject to lockups that restrict disposal. The shares of AI Financial held by investors who participated in the fundraising also fell more than 90%. Its market capitalization is only $80 million (about 120 billion won).
Trump Family Holds Rights to 75% of WLFI Sales; Secures $500 Million in Cash
The Trump family holds rights to 75% of the proceeds from World Liberty's WLFI token sales. AI Financial's purchases handed them about $540 million (about 810 billion won) in cash. Trump's disclosure confirmed income of $527 million (about 790 billion won) from WLFI token sales.
Zach Witkoff, CEO of World Liberty and son of Trump special envoy Steve Witkoff, served as chairman of the payments company then known as Alt5. At the time of the acquisition, Witkoff told CNBC it was "an amazing company with amazing technology." But the new owners made little progress integrating World Liberty's USD1 stablecoin into the Alt5 e-commerce payments platform. According to transaction data on the Alt5 website, not a single USD1 transaction has ever been processed on the platform.
Late last year, Alt5 announced the resignations of its CEO; its acting CEO and chief financial officer (CFO); its chief operating officer (COO); and a director who chaired the audit committee.
In May, AI Financial expressed going-concern doubts, citing a quarterly loss of $271 million (about 408 billion won) from the decline in the value of its WLFI holdings and an increase in debt of $39 million (about 59 billion won). AI Financial said it had drawn down $15 million (about 22.6 billion won) under a loan agreement with World Liberty.
The sale of AI Financial's payments subsidiary now spins off the only profitable business of a company that earned $25 million (about 38 billion won) last year. According to the deal, Nasdaq-listed Perpetuals.com will pay $5 million upfront in its own stock for the subsidiary. It will pay an additional $10 million upon meeting revenue targets. Perpetuals.com also plans to repay the payments division's loans.
White House spokeswoman Anna Kelly said all of Trump's assets are "held in a fully discretionary account managed by an independent third-party financial institution" and that "there is no conflict of interest." She added that "the president has implemented policies that make all Americans wealthier and more prosperous."
Meanwhile, DT Marks DEFI, an entity in which Trump holds a 70% stake, owns a 38% stake in World Liberty. Trump's three sons are co-founders, and Trump is listed as an "honorary co-founder."
