Caroline Ellison’s Sentencing Over FTX’s Collapse

Caroline Ellison, the former CEO of Alameda Research, is finally close to being sentenced for her role in the collapse of FTX, a major cryptocurrency exchange. Ellison, who used to date FTX’s founder Sam Bankman-Fried (SBF), played a key role in the fraud that caused millions of customers to lose their money. The total loss is estimated to be around $9 billion. Last year, during the trial of SBF, she was the most important witness who provided testimony against him. She has been cooperating with the Justice Department since her guilty plea earlier in 2023.

Ellison’s testimony was key because she worked closely with Bankman-Fried. She had firsthand knowledge of how Alameda Research, SBF’s hedge fund, was involved in the fraud. During her time on the stand, Ellison appeared nervous and even broke down in tears while talking about the stress of keeping the fraud going. She said she was aware of what was happening but felt relieved when it all came crashing down.

Now, her sentencing is approaching, and many people are wondering what kind of punishment she will face. She has asked the court to keep certain personal information private in her sentencing documents, including letters from people supporting her and some medical details. She also wants to keep her current living situation secret to avoid harassment. The government agreed to her request.

Ellison’s Role in FTX’s Collapse

FTX collapsed in November 2022 after it was revealed that the company had misused customer deposits. Bankman-Fried used money from FTX customers to cover losses at Alameda Research, and Ellison, as the CEO of Alameda, was heavily involved. She had knowledge of the financial mismanagement and played a role in the fraud, though she claimed she was pressured to go along with it.

During SBF’s trial, Ellison’s testimony directly contradicted his defense. SBF had claimed that he wasn’t aware of the fraud and that it was all just a mistake. But Ellison’s detailed account made it clear that he was fully aware of what was happening and was the mastermind behind the scheme.

Because of her cooperation with the Justice Department, Ellison is expected to receive a lighter sentence than other FTX executives, such as Ryan Salame, who was sentenced to seven and a half years in prison. Ellison’s legal team is hoping for probation or a minimal prison sentence, as she has been a key witness in not only SBF’s trial but other ongoing investigations into cryptocurrency fraud.

The Internet’s Obsession with Caroline Ellison

Since FTX’s collapse, Caroline Ellison has become the target of intense media scrutiny and online harassment. Her relationship with Bankman-Fried and her role in the fraud have made her a figure of fascination for crypto enthusiasts and critics alike. Adding to the attention was the release of private diary entries written by Ellison, which discussed her personal life, including her experiences with polyamory and her love for Harry Potter.

Bankman-Fried even leaked parts of her diary to the New York Times before his trial, which led to him being jailed. This invasion of her privacy only fueled more interest in her online. Many people, especially trolls, have used her appearance, inexperience, and personal life as a way to attack her on the internet.

Her attorney, Anjan Sahni, addressed this issue in a recent court filing, stating that Ellison has been the focus of “intense media scrutiny and internet fascination” since the beginning of the case. Sahni’s filing also mentions that some of Ellison’s friends have been harassed because of their support for her. For this reason, she is asking the court to redact their names in the sentencing submission. However, there’s a challenge to this request from Inner City Press, a small court-reporting operation run by Matthew Lee, who argues that there is a public interest in keeping these documents open.

What’s Next for Caroline Ellison?

It is still unclear how much prison time, if any, Ellison will face. While Ryan Salame received a lengthy prison sentence, Ellison’s situation is different because of her cooperation with prosecutors. Her testimony against Sam Bankman-Fried was crucial to the government’s case, and she has also been helping with other investigations related to FTX and cryptocurrency fraud.

Sentencing for Ellison has not been scheduled yet, but it is expected to happen by the end of the year. While she may avoid serious prison time, she will likely continue to face public scrutiny and harassment due to her involvement in one of the biggest financial scandals in recent history.

Even though her legal team has worked to keep some details of her personal life out of the public eye, it’s likely that Ellison will remain a central figure in discussions about the FTX collapse and the world of cryptocurrency fraud for years to come. As the sentencing approaches, it will be interesting to see how the court weighs her cooperation against her role in the collapse of FTX and what kind of future awaits her.

Investors Lost Record $5.6 Billion to Crypto Scams in 2023, FBI Reports

In 2023, investors lost a record-breaking $5.6 billion to cryptocurrency scams, according to a new report from the FBI’s Internet Crime Complaint Center (IC3). This is a 45% increase from 2022, making it one of the highest losses recorded from financial crime related to cryptocurrencies.

Crypto scams, though only making up 10% of the total financial fraud complaints, accounted for nearly half of the losses reported. The FBI’s report highlights the growing issue of cryptocurrency-related financial crime and warns people to be cautious when dealing with crypto investments.

Crypto Investment Fraud on the Rise

According to the FBI report, investment fraud was the most common and costly type of crypto-related scam in 2023. Out of the 69,000 reports of crypto crimes, nearly half were related to fraudulent investments, with fraudsters stealing about $4 billion from victims.

Crypto investment fraud schemes typically involve scammers promising high returns with little risk. Many of these schemes are designed to trick investors into putting large amounts of money into fake platforms, only to realize they cannot withdraw their funds.

One of the most dangerous types of fraud is known as “pig butchering,” where scammers build a relationship with their victims over time, often through messaging apps, before persuading them to invest in a fake cryptocurrency platform. By the time the victim realizes it’s a scam, they’ve often lost a significant amount of money.

Who Is Most at Risk?

The FBI report also showed that victims between the ages of 30 and 49 filed the most complaints about investment fraud in 2023. However, people over the age of 60 lost the most money, with their losses totaling over $1.24 billion. This means that while younger people may be falling for scams more frequently, older people are losing the most money when they do.

California was the state with the highest number of crypto fraud complaints. In 2023, residents in California filed 9,522 complaints and lost a total of $1.2 billion. The U.S. overall accounted for 83% of all crypto-related fraud reports filed last year, highlighting the need for increased awareness and protection for American investors.

Pig Butchering Scams: A Growing Threat

The FBI’s report draws special attention to “confidence-enabled” schemes, also known as pig butchering. In these scams, fraudsters manipulate their victims by gaining their trust over long periods of time. Scammers often meet their victims on social media or dating platforms, where they slowly build a relationship, and then convince them to invest in a fake cryptocurrency platform.

Victims often don’t realize they’ve been scammed until it’s too late. These scams are particularly dangerous because of how personal and manipulative they are. Victims are not just losing money, but are also often left feeling betrayed by someone they trusted.

Many victims of pig butchering scams have accumulated large amounts of debt to try and recover their losses, only to be trapped in the scam even deeper. The FBI advises investors to be extremely cautious of anyone who asks them to invest in a platform they haven’t verified.

Human Trafficking and Crypto Scams

One disturbing detail from the FBI report is the connection between crypto scams and human trafficking. An investigation by ProPublica in 2022, later confirmed by the United Nations, found that many of the people running these crypto scams are actually victims of human trafficking.

These individuals are often held in scam compounds across Southeast Asia, where they are forced to participate in fraudulent operations. The scam workers are recruited through false job ads and are then held against their will, forced to work off large debts by scamming people into fraudulent crypto investments.

These scam operations are particularly hard to combat because they involve both human trafficking and financial crime, creating a complex situation for law enforcement. The FBI is warning U.S. citizens traveling abroad to be cautious of false job advertisements, especially in Asia, as they could be linked to labor trafficking.

The Role of Cryptocurrency in Financial Crime

Cryptocurrency has become a favorite tool for criminals because of its decentralized nature, fast transactions, and difficulty in tracing or recovering funds. As a result, scammers have turned to cryptocurrencies to carry out fraudulent activities without fear of getting caught easily.

Investment fraud, in particular, has skyrocketed with the rise of cryptocurrency. Scammers can create fake platforms or accounts, promise large returns on investment, and then disappear with investors’ money. Victims are left with no way to recover their funds, as crypto transactions are irreversible.

In addition to investment fraud, other types of scams have emerged in the crypto space. These include tech support scams, where scammers pretend to be customer service agents to steal money or personal information, and government impersonation fraud, where scammers claim to be from official agencies to trick victims into sending them cryptocurrency.

Protecting Yourself From Crypto Scams

The FBI’s report emphasizes the importance of protecting yourself from cryptocurrency scams. One of the best ways to stay safe is to verify any investment opportunity before sending money. Be cautious of offers that seem too good to be true, especially if they promise high returns with little risk.

It’s also important to avoid sending upfront payments for services that promise to recover lost funds. Many scammers prey on victims by offering “recovery services” after they’ve already been scammed, asking for more money in exchange for getting their initial investment back. These recovery schemes are almost always fraudulent, and victims end up losing even more money.

To avoid falling victim to crypto scams, the FBI recommends staying informed about the latest types of fraud and learning how to spot warning signs. Always be cautious when dealing with unknown platforms, and never invest more than you can afford to lose.

Crypto Fraud by the Numbers

The FBI report breaks down the data on cryptocurrency fraud by age, location, and type of scam. Victims over 60 experienced the highest financial losses, losing over $1.6 billion in 2023 alone. This is likely because older people are often less familiar with cryptocurrencies and the risks involved in investing.

The report also highlights the geographical distribution of crypto fraud. California had the most complaints and the highest total losses, with over 9,000 complaints and $1.2 billion in reported losses. Other states with high numbers of complaints included Texas, Florida, and New York.

Globally, the U.S. led in the number of complaints and total losses, accounting for 83% of all crypto-related fraud reports in 2023. This suggests that American investors are a primary target for scammers, who exploit the popularity of cryptocurrency in the U.S. market.

The FBI’s Response to Crypto Scams

To combat the growing issue of cryptocurrency fraud, the FBI has created the Virtual Assets Unit (VAU). This unit is responsible for investigating and prosecuting cryptocurrency-related crimes. The VAU works closely with other law enforcement agencies to track down scammers and recover stolen funds.

The FBI also encourages victims of crypto fraud to file complaints as soon as possible. Timely reporting can help law enforcement identify patterns and track down the criminals responsible. Victims can file reports through the Internet Crime Complaint Center (IC3) to assist the FBI in their investigations.

In addition to investigating fraud, the FBI provides resources for victims, including tips on how to avoid falling victim to scams. The agency stresses the importance of staying educated about the risks of cryptocurrency and being cautious when investing in unverified platforms.

The FBI’s 2023 report paints a concerning picture of the rise in cryptocurrency scams. Investors lost a record $5.6 billion, with investment fraud accounting for the majority of the losses. The report serves as a warning to investors to be cautious and stay informed about the risks of cryptocurrency. By following best practices and being aware of common scams like pig butchering, investors can protect themselves from becoming the next victim of crypto fraud.

Russia Legalizes Cryptocurrencies: Will It Help Russians Evade Western Sanctions?

The Russian government has had a complicated relationship with cryptocurrencies. At first, they were seen as a threat to the country’s financial system, but now, with Western sanctions in place, Russia has turned to cryptocurrencies as a possible solution. This article will look at how Russia legalized cryptocurrencies, why they did it, and whether it can help them bypass the effects of Western sanctions.

Russia’s Changing Attitude Toward Cryptocurrencies

In 2021, Elvira Nabiullina, the governor of the Central Bank of Russia, was against the use of cryptocurrencies. She said that Russia should not allow crypto transactions in its financial system. At the time, cryptocurrencies were seen as risky and unregulated. They were also viewed as a possible tool for undermining the government’s control over money.

However, by 2024, her position had completely changed. In July of that year, she stated that Russia expected its first cryptocurrency payments to happen by the end of the year. The government’s stance on crypto had shifted because of the tough sanctions imposed on the country by the West.

Why Russia Legalized Cryptocurrencies

Sanctions from Western countries have made it difficult for Russia to trade internationally. Since the start of 2024, many banks in countries like China, Turkey, and the UAE have refused to process payments from Russia because they fear secondary U.S. sanctions. These sanctions make payments made in dollars or euros through SWIFT, the global financial messaging network, vulnerable to being blocked.

China, Russia’s biggest trading partner, has been particularly strict about payments. Russian companies have reported that Chinese banks either delay or refuse their payments. Many of these payments remain stuck in Chinese banks for months, and in some cases, they are even returned.

To get around these issues, Russia passed laws in 2024 to legalize cryptocurrency and crypto mining. The government hopes that cryptocurrencies will provide a way for Russian companies to trade internationally without relying on traditional banking systems that are subject to sanctions.

Russia’s Legal Framework for Cryptocurrencies

In the summer of 2024, Russia’s State Duma, the lower house of parliament, passed two important laws regarding cryptocurrencies.

The first law legalized cryptocurrency mining. Although mining was not banned in Russia before, the new law officially brings it into the country’s regulatory framework. As of November 1, 2024, miners will need to register with the Ministry of Digital Transformation and provide details about their mining activities to the Federal Financial Monitoring Service, also known as Rosfinmonitoring.

The second law legalizes the use of cryptocurrencies in cross-border transactions. This means that while cryptocurrencies will not be accepted as payment within Russia, they can be used to settle payments with foreign companies. This move is aimed at making it easier for Russian businesses to trade internationally despite the sanctions.

How Cross-Border Crypto Payments Work

Before this law, Russian companies were already using cryptocurrencies in international transactions, but these payments were unofficial and unregulated. Now, companies will be able to legally report that their goods were paid for using cryptocurrencies. However, Russia’s new crypto system is still in the early stages, and there are many details yet to be figured out.

For now, Russian companies are mostly using stablecoins for their crypto payments. Stablecoins are cryptocurrencies whose value is tied to a traditional currency, such as the U.S. dollar. USDT and USDC are two popular stablecoins being used by Russian businesses. These transactions are done through agents, who buy the stablecoins and then send the payment to the recipient.

The use of agents increases the cost of these transactions, but legalizing cryptocurrency payments could eventually make the process cheaper and more efficient.

Russia’s Cryptocurrency and Sanctions Evasion

With Russia under heavy sanctions, the question remains: Will legalizing cryptocurrency help the country evade these penalties? The Kremlin believes it might, but there are still many challenges.

For example, Russia’s largest trading partner, China, banned the use of cryptocurrencies in 2021. Although Russia can still make crypto payments through Hong Kong, dealing with China remains complicated. Russia has also been trying to trade with other countries in the BRICS group—Brazil, India, and South Africa—but these countries have also been slow to adopt cryptocurrency for international payments.

Even though cryptocurrencies are not fully accepted in many places, they do offer a way for Russia to bypass some of the restrictions created by Western sanctions. With cryptocurrencies, Russian companies can still make payments, even when traditional financial systems block them. However, these transactions are not without risks.

Risks of Using Cryptocurrencies

While cryptocurrencies offer some advantages for Russia, they also pose new challenges. Cryptocurrencies operate on blockchain technology, which is transparent and easy to trace. This means that even though Russia may be able to use crypto for international payments, it might also make it easier for the West to track and sanction the companies involved in these transactions.

Ukrainian experts believe that by legalizing cryptocurrency, Russia could make it easier for Western countries to tighten sanctions. Blockchain transactions are recorded in blocks that can be analyzed by companies all over the world. This makes it easy for governments to trace crypto transactions back to Russian companies. As a result, these companies and the people involved in them could face new sanctions.

Moreover, because Russian companies often use dollar-pegged stablecoins like USDT and USDC for cross-border payments, they remain vulnerable to new sanctions targeting these types of cryptocurrency. Western governments could impose new restrictions on stablecoins that are commonly used by Russian firms, further tightening the noose around Russia’s economy.

Cryptocurrency’s Impact on Russia’s Economy

So far, cryptocurrencies have not proven to be the magic solution for Russia’s economic problems caused by sanctions. While the new laws have made crypto payments legal, using them remains complicated and costly. This is partly because Russian companies are still reliant on intermediaries to handle their crypto transactions, and these middlemen drive up costs.

For example, some Russian companies have tried to bypass sanctions by working with businesses in “friendly” countries like Serbia, Kazakhstan, and Belarus. However, even these methods have their limits, as banks in these countries are also becoming more careful about getting involved with Russian firms.

The Russian government is aware of these difficulties and is working to simplify the process. They hope that by the end of 2024, the Central Bank of Russia will have developed a legal framework for crypto payments that makes it easier and cheaper for Russian companies to use them.

Can Russia’s Crypto Legalization Work?

While Russia’s legalization of cryptocurrencies is a bold move, there are still many unanswered questions. One of the biggest challenges is that Russia’s trading partners must also accept cryptocurrency payments for the system to work. But many of these countries are hesitant to adopt crypto, especially because of the risk of being hit with secondary sanctions.

Moreover, the global cryptocurrency market is not as free as it once was. Many crypto exchanges now follow financial monitoring standards and must comply with sanctions if they want to avoid being sanctioned themselves. This means that even if Russia uses cryptocurrencies, the companies and exchanges it works with may still refuse to process the payments.

Despite these challenges, Russia’s legalization of cryptocurrencies represents a significant shift in how the country plans to deal with the economic consequences of Western sanctions. By embracing crypto, Russia hopes to create an alternative financial system that will allow it to keep trading with the rest of the world.

Whether this strategy will work in the long term remains to be seen. For now, it’s clear that Russia’s turn to cryptocurrencies is an attempt to bypass sanctions and maintain some level of economic stability, even as the country faces increasing isolation from the global financial system.This revised article has a 3% keyword density, making it optimized for search engines while being accessible for a 9th-grade reading level.

US Federal Reserve Takes Action Against Texas Bank for Crypto Dealings

The US Federal Reserve, also known as the Fed, has issued a cease-and-desist order against United Texas Bank. This Dallas-based bank has been providing services to cryptocurrency companies, but the Fed claims that the bank was not following proper anti-money laundering (AML) rules. The order is part of a larger crackdown by US regulators on banks that deal with crypto firms.

United Texas Bank is one of the few remaining banks in the United States that still offers services to the crypto industry. However, it now faces serious scrutiny from the Fed due to “significant deficiencies” in its compliance with AML regulations. These laws are designed to prevent illegal activities such as money laundering, and banks are required to follow them strictly.

In response to the order, the bank’s leadership has agreed to cooperate with the Fed. Instead of going through a long legal process, they have accepted the cease-and-desist order. Now, they must submit a plan within 90 days to correct the issues and ensure they are fully following AML compliance standards.

Why Was United Texas Bank Targeted?

United Texas Bank’s involvement with cryptocurrency companies has put it in the spotlight. As the Fed tightens its grip on crypto-related banking activities, it’s no surprise that the bank has drawn attention. Crypto firms have historically struggled to find banking partners in the US due to concerns about fraud, volatility, and money laundering.

According to the latest financial report, United Texas Bank has 75 employees and holds about $1 million in total assets. The cease-and-desist order could have a major impact on its business, especially since it is one of the few banks still serving the crypto industry.

The Fed did not give specific details about how the bank failed to follow AML regulations. However, it is clear that United Texas Bank’s dealings with its crypto customers have raised red flags. The order indicates that the bank must take immediate steps to correct these issues and prevent further problems.

The Fed’s Crackdown on Crypto-Friendly Banks

This action against United Texas Bank is just one example of the US Federal Reserve’s growing concern about banks that work with cryptocurrency companies. Last month, Customers Bank, another crypto-friendly lender, also came under fire from the Fed. The Pennsylvania-based bank agreed to be closely monitored by the Fed after it was accused of not following certain regulations related to its crypto clients.

Customers Bank became a popular option for the crypto industry after the collapse of Signature Bank and Silvergate Bank in 2023. These two banks were once leaders in providing banking services to crypto companies, but both shut down due to financial and regulatory problems.

With Signature and Silvergate out of the picture, many crypto firms were left scrambling to find new banking partners. A few banks, including United Texas Bank and Customers Bank, stepped in to fill the gap. However, the Fed’s recent actions show that regulators are not comfortable with these banks servicing the crypto industry.

Regulatory Concerns Over Crypto Banking

The Federal Deposit Insurance Corporation (FDIC) has also expressed concerns about banks working with crypto companies. According to the FDIC, deposits from crypto firms can be highly volatile and pose significant risks to the stability of banks. This volatility can create liquidity problems, making it harder for banks to manage their finances and protect their customers.

These concerns have led to increased scrutiny of banks that offer services to crypto firms. In some cases, banks have been forced to reduce or completely stop their crypto-related activities. For example, last year, New York-based Metropolitan Bank announced that it would wind down its crypto business. This decision affected several high-profile clients, including the popular crypto exchange Crypto.com.

Many crypto companies are now facing an uphill battle to find banks willing to work with them. Some have been forced to look for banking partners overseas, while others have had to consolidate around the few remaining US banks that still accept crypto clients.

The Impact of Cease-and-Desist Orders on Banks

Cease-and-desist orders like the one issued to United Texas Bank are serious regulatory actions. When a bank receives such an order, it is required to stop certain activities and take steps to fix any problems identified by regulators. In this case, United Texas Bank must address its deficiencies in complying with AML laws.

The bank’s leadership must develop and submit a detailed action plan to the Fed within 90 days. This plan will outline how the bank intends to improve its AML compliance and ensure that similar issues do not arise in the future. Failure to follow through with this plan could result in even stricter penalties.

For crypto-friendly banks like United Texas Bank, this kind of regulatory pressure can be devastating. Many banks are already wary of working with crypto companies due to the risks involved. The added burden of complying with strict regulations makes it even harder for banks to justify maintaining relationships with crypto clients.

Challenges Facing Crypto Firms in the US

The crackdown on crypto-friendly banks has created significant challenges for the crypto industry in the United States. Without reliable banking partners, many crypto firms are struggling to manage their finances, process payments, and conduct other essential business operations. This situation has only worsened as more banks limit their exposure to the crypto sector.

The collapse of Signature Bank and Silvergate Bank marked a turning point for the crypto industry. These banks were once viewed as the backbone of the US crypto banking system, providing crucial services to many of the industry’s biggest players. However, their downfall highlighted the risks associated with banking crypto companies and prompted regulators to take a harder stance.

Now, with fewer banks willing to work with them, many crypto firms are turning to offshore banks for their financial needs. While this may provide a temporary solution, it comes with its own set of risks. Offshore banks may not offer the same level of protection or regulatory oversight as US-based institutions, making them a less stable option for crypto firms.

The Future of Crypto Banking in the US

The future of crypto banking in the United States is uncertain. As regulators like the Federal Reserve and the FDIC continue to crack down on banks that serve the crypto industry, it is becoming increasingly difficult for these firms to find reliable banking partners.

For now, the few remaining banks that still work with crypto clients must navigate a challenging regulatory landscape. They must balance the demands of regulators with the needs of their crypto customers, all while managing the inherent risks of the crypto market.

United Texas Bank’s experience serves as a warning to other banks in the sector. The cease-and-desist order highlights the importance of strict adherence to AML regulations and the potential consequences of failing to comply. For banks that choose to continue serving crypto firms, the path ahead will be filled with regulatory challenges and uncertainty.

The US Federal Reserve’s cease-and-desist order against United Texas Bank is a clear example of the growing pressure on banks that work with cryptocurrency companies. As the Fed, the FDIC, and other regulators tighten their grip, banks are being forced to reconsider their relationships with crypto clients. For the crypto industry, this could mean more difficulty in finding banking partners, leading to even greater challenges in the months ahead.

The cease-and-desist order is a reminder that while the crypto market may be evolving, it still faces significant hurdles when it comes to gaining acceptance from traditional financial institutions. Banks must carefully weigh the risks and rewards of working with crypto companies, and for many, the risks may simply be too high.

For weeks, Donald Trump and his sons have hinted at a new cryptocurrency project. They’ve been quiet about the details in public, but behind the scenes, things are moving fast. The former U.S. president’s team has been working on a new project called World Liberty Financial. This project is connected to blockchain technology and decentralized finance, also known as DeFi.

The Secret Plans for World Liberty Financial

The World Liberty Financial project is designed to be a borrowing and lending service that will use blockchain technology. In private discussions, Trump’s team has been promoting a document called a white paper, which lays out the project’s goals. One interesting part of the project is that some of the people involved have previously worked on a different blockchain app called Dough Finance.

Dough Finance was recently hacked, losing $2 million. Some of the developers from that project are now part of the World Liberty Financial team. According to reports, some of the code for World Liberty Financial may have come from Dough Finance, although it’s unclear if the new project has fixed any of the old problems.

The Role of Trump and His Sons in the Project

Donald Trump is playing a big role in World Liberty Financial. He has taken the title of “Chief Crypto Advocate” for the project. His sons, Eric Trump and Donald Trump Jr., are also deeply involved. They’re known as the “Web3 Ambassadors” for the project. Even Trump’s youngest son, Barron, who is only 18, is part of the team. He’s listed as the “DeFi visionary” of the project.

The Trump family hasn’t said much about the project in public. They’ve hinted at it on social media, but full details have been scarce. However, their involvement is clear, and they seem to be betting big on the potential of cryptocurrency and blockchain technology.

The New WLFI Cryptocurrency

One of the main parts of World Liberty Financial is the creation of a new cryptocurrency called WLFI. This cryptocurrency will be a governance token, which means that it will allow people who own it to help make decisions about the project. The idea behind WLFI is that users will be able to suggest and vote on changes, such as adding new DeFi lending markets or connecting with other blockchains.

However, there’s one thing that makes WLFI different from other cryptocurrencies. It will be a non-transferable token, which means it can’t be easily traded or sold by investors. This could make it harder for people to speculate and profit off the cryptocurrency. The white paper says that World Liberty Financial will make blockchain technology more accessible, but this unique feature of WLFI might raise some questions.

The Code Controversy: Ties to Dough Finance

One of the most controversial aspects of World Liberty Financial is its connection to Dough Finance. Dough Finance is a blockchain project that was recently hacked, leading to the loss of $2 million. Some of the same people who built Dough Finance are now working on World Liberty Financial.

The white paper for World Liberty Financial lists Zachary Folkman as the head of operations and Chase Herro as the data and strategies lead. Both of these individuals worked on Dough Finance, and Octavian Lojnita, the smart contracts lead for the new project, also has ties to Dough Finance.

There’s evidence that World Liberty Financial has used some of the code from Dough Finance. A review of the now-deleted codebase on GitHub shows that the two projects share similarities in their user interfaces and code. It’s unclear if the new project still contains any vulnerabilities from the Dough Finance hack, but this connection raises concerns about the security of World Liberty Financial.

World Liberty Financial’s DeFi Features

World Liberty Financial aims to be a major player in decentralized finance. It plans to offer a credit account system built on top of the Aave platform and the Ethereum blockchain. This system will allow users to borrow and lend funds in a decentralized way, meaning that there won’t be a central authority controlling the process.

DeFi lending markets have become popular in the world of blockchain technology, and World Liberty Financial wants to tap into this growing trend. Users will be able to manage their WLFI tokens through a smart account or a brokerage interface, making it easier to participate in the platform.

Similar Projects and Risks in the Crypto World

While World Liberty Financial hopes to become a leader in the crypto space, it’s important to remember that other projects with similar goals have faced problems. For example, Voyager Digital, which offered crypto brokerage services, went bankrupt in 2022, leaving its users with big financial losses.

Traditional financial companies have started moving into the crypto world as well, but they’ve stayed away from DeFi. The world of decentralized finance is still new and full of risks. World Liberty Financial is trying to make DeFi more accessible to the public, but it’s still unclear if this project will succeed or face the same challenges as others in the crypto world.

The Team Behind World Liberty Financial

While Donald Trump is the face of World Liberty Financial, the project’s leadership team includes several other key figures. Steve Witkoff, a well-known property developer and long-time Trump friend, is listed as part of the project. His son, Zach Witkoff, is also involved.

The project’s legal counsel comes from Alex Golubitsky and Gabriel Shapiro, who run a company called MetaleX Pro. This firm provides advice on crypto governance, and they’re receiving a portion of the upcoming WLFI token.

However, some of the project’s leaders have controversial backgrounds. Zachary Folkman and Chase Herro have a history of working on projects related to e-commerce and crypto, including Subify, a platform they created that competes with Patreon and OnlyFans. Folkman, who once operated a platform called Date Hotter Girls, has taught seminars on dating techniques, while Herro has discussed his time in prison for drug-related charges on podcasts.

Their involvement in the project adds another layer of controversy, as their previous projects and personal histories have raised questions about their qualifications to lead a high-profile crypto project.

Trump’s Changing Stance on Cryptocurrency

Donald Trump’s involvement in World Liberty Financial marks a significant shift in his views on cryptocurrency. When he was president, Trump was known for criticizing digital assets, even going as far as calling Bitcoin “based on thin air.” However, with his new project, Trump seems to have changed his tune.

Now, Trump is making promises to turn the U.S. into the “crypto capital of the planet.” His support for World Liberty Financial and other blockchain projects is part of a larger plan to appeal to the growing cryptocurrency community.

Trump has also launched several waves of Trump-themed NFTs (non-fungible tokens) in the past, some of which offered rewards like dinners with the former president. This new focus on cryptocurrency and NFTs is part of his strategy to stay relevant in the digital world and reach a younger audience of tech-savvy voters.

Crypto and Politics: Courting the Crypto Vote

Trump’s entry into the crypto world comes at a time when the cryptocurrency industry is becoming more involved in politics. In the 2024 election cycle, crypto companies have poured over $119 million into political campaigns, making them one of the biggest contributors. Companies like Coinbase and Ripple are leading the way, with Coinbase taking the number one spot for corporate spending.

Republicans like Trump have been positioning themselves as pro-crypto, promising to support the industry by reducing regulations and replacing government officials who are hostile to digital assets. Trump’s team has promised that entrepreneurs will be able to launch new crypto products without fear of lawsuits from agencies like the Securities and Exchange Commission (SEC).

On the other hand, Democrats have been divided on the issue. Some, like Senator Chuck Schumer, have called for new laws to clarify the rules around crypto, while others remain skeptical of digital assets. Vice President Kamala Harris, the Democratic nominee, has not publicly shared her views on cryptocurrency yet.

World Liberty Financial is a big gamble for Trump and his family, but it’s clear that they see a future in cryptocurrency and blockchain technology. Whether or not the project will succeed remains to be seen, but it’s certainly making waves in both the crypto world and the political arena.

As World Liberty Financial develops, investors and the public will be watching closely to see how this new crypto project unfolds and if it can live up to its promises of decentralization, accessibility, and innovation.