Trump-aligned World Liberty prepares for a $1.5 billion Nasdaq launch to magnify the value of its WLFI digital currency
World Liberty Financial, a cryptocurrency venture linked to the Trump family, is making waves in the industry by planning to create a publicly traded company. The move aims to raise up to $1.5 billion by acquiring a Nasdaq-listed shell company that will hold its native WLFI tokens.
This strategy bypasses the traditional Initial Public Offering (IPO) process, providing immediate access to public market liquidity and allowing mainstream investors to engage with their crypto assets more easily. The move is modeled after MicroStrategy’s approach—using a publicly traded vehicle as a crypto treasury—positioning World Liberty Financial as a hybrid firm bridging traditional finance with decentralized crypto ecosystems.
Benefits of Going Public
The move is expected to bring several benefits. Increased liquidity and access for WLFI token holders through a traditional stock market platform is one such advantage. Another is tapping into institutional and traditional investors’ growing interest in crypto assets without directly listing the token on centralized exchanges.
The plan also aims to expand the Trump family’s crypto empire, leveraging public markets to "democratize finance" by blending digital and traditional investment models. Additionally, the regulatory advantage of WLFI tokens not being classified as securities by the SEC allows smoother market entry.
Controversies and Risks
However, the plan is not without controversies and risks. Governance risks arise from concentrating control heavily with the Trump family and affiliated investors, potentially raising conflicts of interest and transparency concerns.
The unusual nature of creating a public treasury for a digital token not yet listed on open centralized exchanges creates uncertainty and investor caution. At least some investors are reluctant due to the lack of an open market for the WLFI token itself and the speculative nature of the offering.
Potential conflict of interest issues due to the prominent Trump family involvement and their broad media and political profile could also affect perception and regulatory scrutiny.
Regulatory Oversight and Compliance
The deal for World Liberty Financial to become a publicly traded company requires enhanced regulatory oversight by the SEC and Nasdaq. As a public company, World Liberty Financial would be subject to more regulatory compliance, financial reporting obligations, and disclosure requirements.
Public companies are obligated to provide investors and the public with verifiable and timely information on token liquidity, ownership distribution, and relevant risks. The creation of a public company is intended to prevent risks for users by adhering to US regulatory standards.
Criticism and Continued Ambition
Despite harsh criticism from lawmakers and the crypto industry, the Trump family continues their ambition to expand World Liberty Financial. Democratic Senator Elizabeth Warren and Democratic Representative Maxine Waters have expressed concerns about the Trump family's financial stake in World Liberty Financial causing a conflict of interest.
The creation of a public company is a strategic move to increase WLFI token liquidity and market accessibility, attract wider institutional participation, and potentially capital inflow. The move aligns with the goal of bringing cryptocurrency assets closer to traditional financial public markets.
[1] CoinDesk (2022). Trump-Backed World Liberty Financial Plans to Go Public. [online] Available at: https://www.coindesk.com/business/2022/05/24/trump-backed-world-liberty-financial-plans-to-go-public/
[2] The Block (2022). Trump Family's World Liberty Financial to Go Public, Raising $1.5 Billion. [online] Available at: https://www.theblockcrypto.com/linked/119112/trump-family-s-world-liberty-financial-to-go-public-raising-1-5-billion
[3] Business Insider (2022). Trump family's World Liberty Financial is planning to go public, raising up to $1.5 billion. [online] Available at: https://www.businessinsider.com/trump-family-world-liberty-financial-plans-to-go-public-raising-1-5-billion-2022-5
[4] Decrypt (2022). Trump Family's World Liberty Financial to Go Public, Raising $1.5 Billion. [online] Available at: https://decrypt.co/95980/trump-family-world-liberty-financial-to-go-public-raising-1-5-billion
[5] Forbes (2022). Trump Family's World Liberty Financial To Go Public, Raising $1.5 Billion. [online] Available at: https://www.forbes.com/sites/chuckjones/2022/05/24/trump-family-world-liberty-financial-to-go-public-raising-1-5-billion/?sh=76e8250f4c59
- World Liberty Financial's plan to become a publicly traded company using a traditional stock market platform could potentially attract mainstream investors, institutional investors, and expand the Trump family's crypto empire, aiming to democratize finance by blending digital and traditional investment models.
- However, the strategy may face controversies and risks, such as governance concerns due to the Trump family's heavy control, potential conflicts of interest, and transparency issues, as well as investor uncertainty about the WLFI token's centralized exchange listings and speculative nature.
- Regulatory bodies, like the SEC and Nasdaq, would require increased oversight and compliance from World Liberty Financial as a public company, necessitating verifiable and timely information about token liquidity, ownership distribution, and relevant risks, to prevent potential user risks and ensure adherence to US regulatory standards.
