- Zachary Folkman, representing World Liberty Financial, proposed deals to crypto startups involving secret multimillion-dollar payments.
- World Liberty, largely owned by a Trump family entity, benefited from Trump’s actions, raising conflict concerns.
- Trump’s involvement in crypto has blurred lines between private enterprise and government policy, raising ethical issues.
The pitch from “ZMoney” arrived on the encrypted messaging app Signal just days before Donald Trump’s presidential inauguration.
“ZMoney” was Zachary Folkman, an entrepreneur who once ran a company called Date Hotter Girls and was now representing World Liberty Financial, the cryptocurrency firm that Trump and his sons had recently unveiled. Folkman was writing to a crypto startup in the Cayman Islands, offering a “partnership” in which the firms would buy each other’s digital coins, a deal that would bolster the startup’s public profile.
But there was a catch, The New York Times found. For the privilege of associating with the Trumps, the startup would have to make, in effect, a secret multimillion-dollar payment to World Liberty.
“Everything we do gets a lot of exposure and credibility,” Folkman wrote, asserting that other business partners had committed between US$10 million ($16.8m) and US$30m to World Liberty.
The Cayman startup rejected the offer, as did several other firms that received a similar pitch from World Liberty, executives said. They considered the deal unethical, concluding that World Liberty was essentially selling an endorsement – and hiding the arrangement from the public.
World Liberty’s executives, who have maintained that they did nothing improper, were undeterred. They successfully pitched similar deals to other firms while also marketing their coin to buyers around the world, reaping more than US$550m in sales, with a large cut earmarked for the President’s family.
Trump’s return to the White House has opened lucrative new pathways for him to cash in on his power, whether through his social media company or new overseas real estate deals. But none of the Trump family’s other business endeavours pose conflicts of interest that compare to those that have emerged since the birth of World Liberty.
The firm, largely owned by a Trump family corporate entity, has erased centuries-old presidential norms, eviscerating the boundary between private enterprise and government policy in a manner without precedent in modern American history.
Trump is now not only a major crypto dealer; he is also the industry’s top policymaker. So far in his second term, Trump has leveraged his presidential powers in ways that have benefited the industry – and in some cases his own company – even though he had spent years deriding crypto as a haven for drug dealers and scammers.
He has filled his administration with sympathisers to the crypto cause, including by appointing a former adviser to industry players as chair of the Securities and Exchange Commission. In addition, the Justice Department recently disbanded a crypto crimes task force, continuing a broader unwinding of Biden-era scrutiny of the industry.
A Times examination of World Liberty’s rapid ascent from fledgling startup to international force – and Trump’s conversion from crypto sceptic to industry cheerleader – highlights the range of conflicts of interest trailing the company:
- World Liberty has directly benefited from Trump’s official actions, such as his announcement of a federal crypto stockpile that would include a digital currency the firm has invested in. The President’s announcement caused a temporary jump in the value of World Liberty’s holdings.
- World Liberty has sold its cryptocurrency to investors abroad, including in Israel and Hong Kong, according to interviews and data obtained by the Times, establishing a new avenue for foreign businesses to try to curry favour with Trump.
- Several investors in World Liberty’s coin managed firms that the federal government accused of wrongdoing. They include an executive whose fraud case was suspended after he invested millions of dollars in World Liberty. Other investors and business partners, some of whom haven’t been publicly identified before, are looking to expand in ways that will require the Trump administration’s approval.
- World Liberty proposed swapping cryptocurrencies with at least five startups, and often used the Trump name to solicit steep payments as part of the deals. Even in an industry with a disreputable history, the deals raised alarm among veteran executives.
“It’s a black spot on our industry,” said Andre Cronje, a founder of SonicLabs, a crypto firm that turned down World Liberty’s pitch. Anyone who accepted would “obviously think they’re going to make money because it’s the officially endorsed Trump project”.
A spokesperson for World Liberty, David Wachsman, disputed that any of the company’s deals constituted a “one-sided payment for services rendered”. But he acknowledged that the company has engaged in “mutual investment deals,” and said that its deal-making had resulted in “thoughtful, strategic exchanges between parties who stand to mutually benefit”.
Wachsman also said it would be “false, absurd and dangerous to suggest that investments or partnerships with World Liberty Financial were conducted as some sort of political quid pro quo”.
“Never has an investor or partner requested any political favouritism,” he said. “Nor would we ever entertain such a possibility.”
Still, the company’s deal-making benefits the President’s family. A Trump business entity owns 60% of World Liberty, according to the company’s website, and is entitled to 75% of certain revenue from coin sales, which could be converted into cash.
“It’s one of the more successful things we’ve ever done,” Eric Trump, the President’s son who runs the family business, said in an interview this month at the Trump Doral golf course in Florida.
He and his older brother, Donald Trump Jr., are actively involved in World Liberty, though they rely on three partners to oversee the daily operations. Two of them, Folkman and Chase Herro, have a mixed track record in crypto. The other is Zach Witkoff, the son of Donald Trump’s envoy to the Middle East, Steve Witkoff, who is also a World Liberty founder.
In recent days, Zach Witkoff, Folkman and Herro were in Pakistan meeting with the country’s Prime Minister, Muhammad Shehbaz Sharif, and other top government officials to discuss World Liberty. The trip, complete with limousines, a dance performance and police escorts, seamlessly blended the President’s business interests with the trappings of a state visit. (Wachsman said no US government officials were involved in the meetings.)
Trump has noted that conflict of interest laws do not apply to him, and that he has broad immunity for official actions he takes as President.
In a statement, a spokesperson for Trump noted that his “assets are in a trust managed by his children,” and that as a result, “there are no conflicts of interest”. (The trust still benefits Trump directly.)
World Liberty’s supporters are unbothered by questions about conflicts.
“Trump wants to make a lot of money in crypto,” Konstantin Kuznetsov, a Russian citizen living in Miami whose Gibraltar-based firm bought US$1m of World Liberty’s coins, said in an interview. “We can join in this wave.”
Chief crypto advocate
As a businessperson who made his name in the tactile world of real estate, Trump never aspired to build a digital coin empire.
Indeed, at the end of his first term, Trump turned to social media to express disdain for cryptocurrencies.
They “are not money,” he warned. Their “value is highly volatile and based on thin air”.
By last year, his views had begun to shift.
His older sons had become enthusiastic crypto proponents after the January 6, 2021, attack on the Capitol effectively exiled the family business from the mainstream financial system.
“We built and sold and held real estate forever. And for a long period of time, I had access to everyone in the world,” Donald Trump jnr explained in a live video appearance at a crypto conference in Washington last month. “All of a sudden that became really difficult. And I sort of realised very quickly just how much discrimination there is in the ordinary financial markets.”
The change of heart also coincided with an influx of millions of dollars in campaign contributions from the crypto industry into the Trump reelection effort. Under the Biden administration, the industry had faced nearly 100 enforcement actions by the SEC, and crypto executives wanted a leader to champion their interests in Washington.
During his campaign stumps, Donald Trump’s qualms about crypto appeared to vanish. At a Bitcoin conference in July, he vowed to turn the United States into the “crypto capital of the planet”.
Two months later, Trump completed his conversion, announcing that he and his sons would enter the crypto marketplace with a new venture called World Liberty Financial.
Trump delivered the news in a livestream at his Mar-a-Lago estate in Florida, where he had gathered with Eric and Donald Jr., along with Herro and Folkman.
“Crypto is one of those things we have to do,” Donald Trump said. “Whether we like it or not, I have to do it.”
Herro and Folkman were unusual choices to partner with a President.
Folkman, who has short curly hair and tattoos, ran a company in his 20s tutoring forlorn men on how to pick up women. In numerous podcast appearances, Herro has recounted his life’s redemption arc, describing a wild youth in which he was charged with marijuana possession and spent a couple of weeks in a Wisconsin jail.
The two men had worked together for years, selling everything from colon cleanses to get-rich-quick advice, before pivoting to crypto with uneven results.
In 2022, Herro urged a roomful of crypto enthusiasts to invest in the currency TerraUSD, calling it “one of the coolest assets in history”. The coin imploded a month later, erasing billions of dollars in wealth. Herro’s most recent venture with Folkman was a crypto platform called Dough Finance, which was hacked in July, leading to the theft of US$2m.
It’s not clear exactly how the pair earned the Trumps’ trust. But Steve Witkoff said last year that he met them through his son, and then introduced them to the family.
On the livestream introducing World Liberty, Donald Trump jnr hailed the men as first-class financial minds.
“You could put them in a boardroom at Goldman Sachs, and they’re going to smoke the people in the room,” he said.
In October, Herro and Folkman got to work on the company’s first initiative – selling a new cryptocurrency, which it called $WLFI, with the goal of US$300m in sales.
These coins would be different from $TRUMP – the so-called memecoin that spiked in January after Donald Trump marketed it to his followers before it abruptly crashed.
World Liberty, at least according to its marketing pitch, eventually plans to operate as a new type of internet bank that would allow customers to borrow and lend money in various digital currencies. Anyone who bought the $WLFI coins would get to vote on certain bank business decisions like shareholders in a traditional company.
Trump was at the core of the pitch. The company published a 13-page “Gold Paper” that described its mission and leadership team. On the cover was a portrait of Trump, styled to look as if gold paint had been splashed across the page.
He would serve as the company’s “Chief Crypto Advocate,” the paper said.
When World Liberty launched, the Trump family and its affiliates were given 22.5 billion units of the crypto coins – a stash now worth at least US$1.1 billion on paper, depending on the various prices used in recent sales.
Under the company’s rules, the Trumps and other World Liberty investors are not allowed to sell their coins on the open market, though the company has said it might eventually lift that restriction if other buyers of the coin agree.
Initially, there were few buyers. By the end of October, World Liberty had sold only US$2.7m worth of the coins, a tiny fraction of its goal.
Election Day was a game changer.
A flood of investors
With polls closed in most of America and Trump on his way to victory, the World Liberty account on the social platform X posted a celebratory message on November 5: “Big things on the horizon.”
Soon a surge of investment flowed into World Liberty’s cryptocurrency.
Most crypto purchases are recorded on a public ledger called the blockchain, with the buyers and sellers largely anonymised. But World Liberty has said it performs extensive checks on investors in its coin, so it knows who they are.
An analysis performed for the Times by the forensics firm Nansen, drawing on crypto industry data, showed that many of the investors were based abroad in places such as Singapore, South Korea, Hong Kong and the United Arab Emirates.
Federal law prevents foreigners from donating to presidential campaigns or inaugural funds, but World Liberty’s coin sale offered a new, legal way to back Trump.
“The main reason for purchasing such a token was to support Trump’s inauguration, as he was the first crypto-friendly president of the United States,” said Keer Lau, chief strategy officer at Orbiter Finance, a Hong Kong-based entity.
Some investors, domestic and overseas, have managed firms that ran afoul of US regulations. One was Yoni Assia, an Israeli who founded eToro, an online trading platform whose US subsidiary reached a US$1.5m settlement with the SEC last year for crypto-related violations. Troy Murray, a Puerto Rico-based investor, also bought World Liberty’s coin. Before that, he had helped create BarnBridge, which in late 2023 agreed to pay the SEC US$1.7m to settle its own crypto-related accusations.
Since Trump took office, some World Liberty investors have pushed the Government for regulatory approvals, or are poised to interact with the administration as they try to build or expand businesses in the United States.
In March, Assia’s company notified the SEC that it intended to go public in the United States. DWF Labs, a crypto firm based in the UAE, announced this month that it had bought US$25m of $WLFI – and that it was opening a New York office.
“Our visibility in the US has been increased because of this deal,” Andrei Grachev, the managing partner of DWF Labs, said in an interview. “We would like to have direct dialogue with the policymakers.”
The crypto executive with perhaps the most to gain from his affiliation with World Liberty is Justin Sun, a Chinese billionaire who founded the crypto platform Tron.
Sun gained global attention late last year, when he spent US$6.2m at an art auction to buy a banana that had been duct-taped to a wall. Not long after, Sun made another headline-grabbing manoeuvre: he spent US$75m on $WLFI coins.
The investment drew widespread criticism given that Sun had a clear incentive to gain favour with the Trump White House. During the Biden administration, the SEC sued Sun, arguing that he had fraudulently inflated the price of a Tron cryptocurrency.
Sun has denied the SEC’s charges, and in a text message to the Times last year, he said his World Liberty investment was simply a vote of confidence in the Trump family’s “excellent project”.
In late February, the SEC asked a federal judge to halt proceedings in Sun’s case: the agency said it was exploring “a potential resolution”. The judge granted the stay.
The stars align
Sun gave World Liberty a big lift. But Trump’s company wanted more money. Much more.
So World Liberty executives soon announced what they called “a transformative initiative” to partner with other crypto outfits and invest in their coins. The strategy, the executives said in February, would leverage World Liberty’s growing clout to help their lesser-known partners.
“It’s like taking care of your brother in the space,” Herro said at a crypto event in New York that month.
But World Liberty’s public pronouncements omitted a key aspect of its private pitch to several crypto startups, executives at these companies told the Times. World Liberty wanted to sell its own coin – not just to invest in others’. It was proposing a currency swap.
Here is the deal World Liberty offered, according to executives at three crypto firms approached by the company: The startups would spend between US$10m and US$30m on a large chunk of World Liberty’s coins. In return, World Liberty would buy a smaller amount of each startup’s own cryptocurrency. World Liberty would keep the rest of the money for itself – a premium as high as 20%.
World Liberty’s purchases would signal to the market that Trump’s firm had deemed the startups worthy of investment. But the market would have no way of knowing that World Liberty had been compensated for that endorsement. Some details of a similar pitch from World Liberty were previously reported by Blockworks, an industry news outlet.
“They kept telling us, ‘We’re like, we’re super close to Trump,’” said Mike Silagadze, CEO of Ether.Fi, a crypto startup that World Liberty approached.
“We immediately rejected,” said Dominik Schiener, who founded the IOTA Foundation, a Berlin-based group that also received the pitch. “It’s a very dishonest approach.”
In his statement, Wachsman, the World Liberty spokesperson, said the Times’ reporting contained “fundamental misunderstandings about standard industry practices” and called the company’s business arrangements “not only common in the blockchain industry but essential for creating lasting economic alignments in business, generally”.
“These arrangements establish skin in the game for all parties,” he added.
The benefits of a partnership were enough to attract at least five crypto firms to strike other deals with World Liberty, without disclosing details of the financial arrangements, the Times found.
In one deal, the Sui Foundation, a US-based group, announced that World Liberty would buy an unspecified amount of its cryptocurrency, prompting Sui’s price to jump more than 10%. As part of the arrangement, the foundation was slated to receive World Liberty’s coins in return, said two people familiar with the deal who requested anonymity to discuss private negotiations.
Other World Liberty partnerships have shown how Trump is mixing his official role with his business. In December, the company announced that it would use technology designed by a startup based in Lisbon, Portugal, Ethena Labs. It also bought more than US$5m of Ethena’s cryptocurrency.
One of Ethena’s investors is Arthur Hayes, a crypto entrepreneur who pleaded guilty to violating the Bank Secrecy Act in 2022 and was sentenced to six months of home detention. Last month, Trump granted Hayes a pardon. (A spokesperson who represents both Ethena and Hayes declined to comment.)
Another World Liberty partner is Ondo Finance, a New York-based startup backed by Founders Fund, conservative billionaire Peter Thiel’s venture capital firm.
World Liberty made its first purchase of Ondo’s coins in December, buying more than 130,000 of them. The transaction at least briefly helped drive up the price of Ondo’s coin, drawing headlines in crypto news sites celebrating World Liberty’s bet.
In January, Ondo donated US$1m to Trump’s inauguration, securing an invite to a candlelight dinner at the National Building Museum in Washington, where the guest list included several of Trump’s Cabinet nominees. Ondo also helped sponsor an inauguration event called the Crypto Ball. Soon after, Donald Trump Jr. and World Liberty’s management team were headliners at a conference Ondo organised in New York.
“This is a moment we weren’t sure was gonna happen,” Ian De Bode, Ondo’s chief strategy officer, said from the stage. “But sometimes the stars align.”
‘Thank Me Later’
In February, Eric Trump passed along some investment advice to his followers on X: “In my opinion, it’s a great time to add $ETH.”
It was the ticker symbol for a digital coin called ether. “You can thank me later,” he added, before deleting that line.
His advice proved prescient.
The next month, his father announced the creation of a “US Crypto Reserve” – a Fort Knox-like repository of cryptocurrencies intended to help bolster the industry.
Donald Trump’s announcement included a list of digital currencies to go into the stockpile. With bitcoin, he included ether, saying it would be “at the heart of the Reserve”.
Ether’s price surged more than 13%.
The spike had an immediate beneficiary: World Liberty. Over the previous few months, the company had bought US$240m worth of ether, according to Arkham, a crypto data firm.
The day the President announced the crypto reserve, the value of World Liberty’s ether stash rose by US$33m, assuming it had not sold any of its holdings. That gain was later lost as ether declined in value.
That same pattern – Trump making policy pronouncements or posting messages that intersected with World Liberty’s business interests – occurred again in March.
In a video feed at a crypto conference in New York, Trump called on Congress to pass legislation governing stablecoins, a type of crypto designed to maintain a value of US$1.
Both the Senate and the House have introduced Bills that would make it easier for firms issuing stablecoins to operate in the United States. In his remarks last month, Trump said that the rise of stablecoins would “expand the dominance of the US dollar”.
A week later, World Liberty announced it was releasing its own stablecoin, USD1. “The future is here, and it is so bright!” Zach Witkoff wrote on X.
Jordi Alexander, a crypto executive who helped World Liberty with its plans to launch its stablecoin, said in an interview that the company had already secured commitments of at least US$1b from investors to buy the stablecoin once it hits the market.
The new venture will only compound World Liberty’s ethical conflicts. The company plans to offer USD1 on a platform developed by Binance, a giant exchange that settled criminal charges with the Justice Department in 2023. This week, Witkoff, Herro and Folkman met with Changpeng Zhao, Binance’s founder and former CEO, in Abu Dhabi, UAE.
Zhao, who served four months in federal prison for money-laundering violations, has been seeking a pardon from the Trump administration, according to people familiar with the matter, who requested anonymity to discuss a sensitive topic. The pardon effort was first reported by The Wall Street Journal.
The overlap between Trump’s policy pronouncements and his business interests have alarmed congressional Democrats, who moved recently to amend the pending stablecoin legislation to bar the Trump family from issuing one.
The amendment failed, and none of the concerns about World Liberty have disrupted its momentum.
Last month, Witkoff was among a group of executives invited to the White House for a first-of-its-kind industry summit.
After the meeting, Witkoff posted a photograph on social media of him smiling outside the White House next to Herro and Folkman.
“Thank you Mr. President,” Witkoff wrote.
This article originally appeared in The New York Times.
Written by: Eric Lipton, David Yaffe-Bellany, and Ben Protess
Photographs by: Tamir Kalifa
© 2025 THE NEW YORK TIMES