Brutkey

Molly White
@molly0xfff@hachyderm.io

A fourth Trump family-connected crypto treasury company is in the works. This one will establish a treasury for WLFI, and the deal has provided the first “price” for the token. At this price, President Trump’s holdings are valued (on paper) at $3.15 billion.

The explosion in crypto treasury companies is making experts in and outside of crypto nervous. A crypto CEO described the “huge” risk based on assets that have “almost nothing backing [them]”. Crypto analysts at Galaxy have compared them to the 1920s investment trust collapse.

Trump business interests Trump’s World Liberty Financial has announced it will be jumping aboard the crypto treasury bandwagon — because apparently the Trumps need to be involved with a fourth.d Using the Nasdaq-listed ALT5 Sigma Corporation, they will set up a crypto treasury with World Liberty’s own WLFI token. ALT5 plans to sell 200,000 new shares to fund the purchase of $1.5 billion worth of WLFI tokens, and add Eric Trump and World Liberty Financial executives Zach Witkoff and Zak Folkman to its board. All three have a financial interest in World Liberty Financial, presenting a blatant conflict of interest in their roles on the ALT5 board. The deal provides the first valuation for the WLFI token, which cannot yet be resold, though the project just voted to allow secondary trading [I88]. Trump personally holds 15.75 billion WLFI tokens, suggesting a paper valuation of $3.15 billion.34 d. Eric and Donald Trump Jr. are part owners of the American Bitcoin mining and treasury company, and Eric is a co-founder and Chief Strategy Officer; the Trump majority-owned Trump Media & Technology Group just acquired a $2 billion bitcoin treasury; Eric Trump is on the board of the Metaplanet treasury company. Donald Trump Jr. also owned a large stake in the Thumzup Media treasury company, though he seems to have recently sold it.52 ↩ The glut of crypto treasury companies is continuing to draw concern [I86, 84]. Eric Benoist of the investment bank Natixis CIB told the Financial Times, “My main problem with this strategy is that I don’t really understand where it ends. The company is in a loop where it has to continually feed that loop with additional purchases, go back to the market to purchase more — this cycle has to continue to justify the premium.” Hmm, why is that description ringing a bell? And why is that bell a klaxon? Even crypto executives are getting uneasy. The FT quotes a crypto market maker CEO who told them, “You’re injecting a huge amount of risk into a system that, in the end, has almost nothing backing it except the continued appreciation of the asset.” Screenshot of I Think You Should Leave episode, where the focus group man states “Oh my God, he admit it!” A report by blockchain firm Galaxy Digital warns of structural risks from the proliferation of such companies: “When hundreds of firms adopt the same one-directional trade (raise equity, buy crypto, repeat), it can become structurally fragile. A downturn in any of these three variables (investor sentiment, crypto prices, and capital markets liquidity) can start to unravel the rest.” Though the report describes the risk as “largely theoretical” (“for now”), it compares the potential spiral to the 1920s investment trust crash:35 Trusts traded at premiums to NAV, issued shares, and used the proceeds to buy more assets. When sentiment turned, those same mechanics amplified the downside. Collapsing premiums choked off access to capital while leverage magnified losses on falling assets. These cascading failures were an accelerant of the 1929 crash and subsequent Great Depression. [Digital Asset Treasury Companies] may be more transparent and better regulated than 1920s trusts, but the mechanics of mNAV-driven capital formation are eerily similar.
Molly White
@molly0xfff@hachyderm.io
sexual assault

The Trumps’ World Liberty has invested in the Falcon Finance “synthetic stablecoin” project that recently depegged after concerns over dubious collateral. (“Synthetic stablecoin” is the new name for “algorithmic stablecoins”, an unpopular term since the Terra collapse.)

Falcon shares a founder with DWF Labs, a company that has also separately partnered with the Trumps’ World Liberty. DWF Labs’ managing partner Andrei Grachev is a convicted fraudster in Russia, and in April (a week before the DWF/WLF deal) tweeted jubilantly, “[it’s] crime szn bro”.

DWF Labs has separately faced multiple scandals, including allegations of pump-and-dumps and wash trading. Last fall, they fired a partner who was accused of drugging a job applicant and trying to coerce her into his hotel room.

DWF Labs and Falcon Finance World Liberty Financial has invested $10 million into Falcon Finance, creator of a “synthetic stablecoin” that recently depegged for several days after questions about potentially dubious collateral.36 (“Synthetic stablecoin” is the new term for “algorithmic stablecoin”, a phrase that fell out of favor after algostablecoins like Terra collapsed in multi-billion dollar fiascoes in 2022.) Falcon shares a co-founder with the Dubai-based DWF Labs, which purchased $25 million of WLFI tokens in April and announced plans to open a New York office. “Our visibility in the U.S. has been increased because of this deal,” said managing partner Andrei Grachev, explaining the decision to open the office. “We would like to have direct dialogue with the policymakers.”37 World Liberty Financial co-founder Zak Folkman described DWF Labs as a “partner” that would “help accelerate” World Liberty.38 DWF’s Grachev previously ran the Moscow branch of the Huobi (now HTX) crypto exchange, and has close ties to the Russian state-owned bank VEB. Before Huobi, Grachev was convicted of fraud in Russia after he set up a fake shipping firm; while on probation, he was accused of participating in multiple cryptocurrency scams.3940 Grachev resigned as Huobi Russia’s CEO in 2019 amid further scam allegations. DWF Labs, only a few years old, has itself been embroiled in scandal after scandal, including pump-and-dump allegations, wash trading allegations, and accusations that a firm partner drugged a female job applicant and tried to coerce her into his hotel room with promises of “inside information”. (DWF Labs denied the market manipulation allegations, and fired the partner accused of assault.)414239 In April, a week before DWF Labs’ WLFI purchase and office announcement, Grachev tweeted “it is a crime szn bro”, responding to a reply to another tweet where he wrote he was “enjoying [the] market nowadays, it is freaking volatile, real Wild Wild West”.43
Molly White
@molly0xfff@hachyderm.io

Justin Sun’s “Sundog” memecoin tweeted a meme depicting its mascot controlling puppet strings attached to the White House, with the caption “You never truly know who’s pulling the strings... 🤫🤫”

Sun has spent around $213 million on Trump-connected cryptocurrency ventures.

Justin Sun With his recent announcement of another $100 million purchase of $TRUMP memecoins, Justin Sun’s total contributions to Trump-connected cryptocurrency projects has come to around $213 million. On July 24, Sun’s “Sundog” memecoin, themed around a smirking corgi, posted a meme on Twitter depicting the mascot controlling puppet strings attached to the White House, with the caption “You never truly know who’s pulling the strings... 🤫” Tweet screenshot: SunDog @SUNDOG_TRX You never truly know who’s pulling the strings… 🤫 [AI-generated image of a corgi dog with a collar depicting the Tron logo, paws raised above the White House, with strings attached to the paws like a marionette] 2:30 AM Jul 24, 2025
Molly White
@molly0xfff@hachyderm.io

All this and much more in this week’s issue of Citation Needed, which is fully reader-supported. If you value Citation Needed, a pay-what-you-want subscription helps me keep reporting, researching, and writing.

https://www.citationneeded.news/signup/