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Trump-Backed DeFi to Boost His Personal Wealth, Not Crypto, Says Digital Asset CEO
- The Trump-backed DeFi project, World Liberty Financial, has launched a strategic token reserve aimed at stabilizing crypto markets, but critics like CEO Alexander Blume view it as a scheme to benefit the Trump family and facilitate political bribes.
- Blume described the token reserve plan as a 'clever grift,' primarily focused on increasing personal wealth for Trump family members and enabling convenient bribery payments while evading regulations.
- WLFI's governance token, WLFI, has seen growing interest with over US$300 million sold to around 80,000 holders, despite initially lacking utility and being non-transferable.
- The announcement of the 'Macro Strategy' reserve by WLFI claims to support leading crypto projects like Bitcoin and Ethereum, but skepticism arises regarding its ability to 'bolster' the market.
- WLFI's recent actions, including selling a significant portion of its crypto assets and facing losses on purchases, raise doubts about the effectiveness of its token reserve in stabilizing markets.
- Blume highlighted that WLFI token holders will not benefit from the reserve as management retains full control and exclusive access to the assets, similar to other companies like MicroStrategy with Bitcoin holdings.
- Unlike MicroStrategy, WLFI lacks regulatory oversight to protect purchasers and ensure transparency in asset management, leading to concerns about the token's utility and security for investors.
- The overall sentiment suggests caution towards WLFI's token reserve, emphasizing the need for investors to be wary of potential risks associated with projects backed by the Trump family.
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