Trump family made $75 million from virtual tokens through crypto project
The Trump family created 5 billion of their own WLFI tokens, valued at approximately $440 million, and used them as collateral on the DeFi platform Dolomite to borrow $75 million in USD1/USDC stablecoins. They then transferred part of these funds to the Coinbase Prime exchange, effectively turning virtually created digital tokens into real money.
These transactions occurred between February and April. Initially, 890 million tokens were minted on February 20, followed by 1.1 billion on March 24, and another 3 billion in early April. A significant portion of these tokens was withdrawn directly via wallets, leading to a full 100% utilization of the USD1 pool, which blocked regular users from withdrawing their deposits.
Meanwhile, the WLFI token price dropped nearly 10%. Essentially, the company leveraged self-created digital assets to access large stablecoin sums, leaving investors without access to their funds and effectively defrauding them.
Dolomite, the DeFi platform involved, is co-founded by one of the company's advisors, highlighting a conflict of interest and raising questions about the legitimacy of these transactions.
This case exemplifies the risks and shortcomings of decentralized finance platforms, demonstrating how token creation without real backing can harm investors.
Likely, these events will prompt stricter crypto regulations and increased scrutiny of transparency within DeFi projects in the near future.
