Inside The Trump Family’s Global Crypto Cash Machine | EUROtoday

DUBAI, Oct 28 (Reuters) – Eric Trump was in Dubai on household enterprise. Meeting with a Chinese businessman and his associates on the sidelines of a cryptocurrency convention in May this 12 months, the son of U.S. President Donald J. Trump ran by way of his ordinary speaking factors concerning the inefficiency of conventional banks and his personal well-known father’s run-ins with financiers.

Then got here the pitch. Buy no less than $20 million of “governance tokens” within the Trump household’s crypto enterprise, World Liberty Financial, and turn out to be a part of a enterprise that Eric Trump predicted would quickly embody the way forward for finance in America, based on an individual aware of the assembly.

To some in that small gathering, the expertise Eric Trump’s workforce described for World Liberty appeared “rudimentary,” the individual mentioned. At the time, World Liberty was a fledgling enterprise. It hadn’t but created the cryptocurrency-based finance platform it promised after its September 2024 launch. It nonetheless hasn’t.

Even so, the pitch apparently labored. On June 26, an obscure entity known as Aqua1 Foundation, which mentioned it was primarily based within the United Arab Emirates, introduced it was shopping for $100 million of cryptocurrency tokens from World Liberty. It was the only largest identified buy of the so-called WLFI tokens on the time.

The Chinese businessman who met with Eric Trump in Dubai was Guren “Bobby” Zhou, who has government roles in a number of companies and who’s below investigation in Britain for cash laundering, based on that nation’s National Crime Agency and a doc filed in an immigration case at London’s Royal Courts of Justice.

Zhou didn’t reply on to requests for remark for this text. In a press release emailed to Reuters, an entity calling itself Aqua Labs Investment LLC mentioned Zhou was its co-founder and described itself as an Abu Dhabi entity of Aqua1 Foundation. The assertion mentioned Aqua1 Foundation’s funding in World Liberty tokens “was a commercial decision consistent with its focus on advancing regulated, scalable digital-asset ecosystems.” Zhou’s relationship to Aqua1 Foundation has not been beforehand reported.

Aqua1 Foundation didn’t reply to requests for remark. Nor did Eric Trump.

The Dubai assembly, reported right here for the primary time, was only one cease on a globetrotting funding roadshow the 2 elder sons of President Trump – Eric and Donald Trump Jr. – launched into across the time of their father’s election to a second time period. In Europe, the Middle East and Asia, they’ve been selling World Liberty and different ventures that funnel traders’ money to Trump household companies, identified collectively because the Trump Organization. The Trump brothers’ efforts have been a whopping success. In the primary half of this 12 months, the Trump Organization’s revenue soared 17-fold to $864 million from $51 million a 12 months earlier, based on Reuters calculations primarily based on the president’s official disclosures, property data, monetary data launched in courtroom instances, crypto commerce info and different sources. Of the first-half complete, $802 million – greater than 90% – got here from Trump crypto ventures, together with gross sales of World Liberty tokens.

That $864 million payday represents precise revenue – money flowing, free and clear, into Trump household coffers. Reuters’ calculations had been reviewed by half a dozen crypto and actual property consultants and a licensed accountant who has studied the U.S. Internal Revenue Service’s method to crypto.

The Trumps’ first-half crypto revenue dwarfed what the household earned from its conventional companies – $33 million from the president’s golf golf equipment and resorts and $23 million for licensing his title to abroad actual property builders, based on the Reuters estimates. More than half the Trumps’ revenue – $463 million – got here from gross sales of World Liberty tokens alone, together with as much as $75 million from Aqua1’s token buy. On its web site, World Liberty says a Trump Organization entity receives 75% of the income from the token gross sales by way of its affiliation with World Liberty. The household additionally made $336 million from gross sales of a Trump meme coin, $TRUMP, Reuters calculated, utilizing assumptions vetted by 5 analysts. Due to a scarcity of transparency within the Trump meme coin enterprise, estimates of revenue from the cash carry the next diploma of uncertainty than these for WLFI token gross sales. The Trumps are minting a trove of arduous money from digital property backed, to date, by little greater than the Trump title. World Liberty tokens, like most crypto merchandise, are registered on digital ledgers known as blockchains. But WLFI tokens supply holders little past a restricted say within the enterprise’s plans, in contrast to governance tokens for comparable tasks. And meme cash just like the $TRUMP coin are primarily collectibles whose worth displays the recognition of the web joke, meme or persona related to them.

World Liberty Financial didn’t reply on to requests for remark for this text. In a letter to Reuters, Timothy Parlatore, a lawyer for the corporate, mentioned: “WLFI tokens are not securities; they are digital assets with real utility, including governance rights that benefit holders as the platform grows.” He additionally mentioned: “The Alleged Valuation and Income Analysis of WLFI Is Inaccurate and Misleading.”

In a subsequent e-mail, Parlatore declined to supply additional specifics on the advantages to holders of World Liberty governance tokens or his critique of the Reuters evaluation.

The soar within the Trumps’ revenue represents “a massive pivot” for the household enterprise, mentioned Carter Davis, an assistant professor of finance at The Ohio State University who has studied cryptocurrency pricing and who reviewed the Reuters calculations. “Even if you go through and you do the most conservative estimate…it’s pretty wild that you end up with such a huge fraction of the income coming from crypto.”

The identities of most consumers of the WLFI tokens are hidden behind opaque “wallet” addresses – the distinctive identifiers traders use as keys to entry and handle their holdings. Among the few main consumers whose identities are identified – a mixture of international and U.S. traders – most have histories of authorized and regulatory entanglements associated to their enterprise endeavors. And because the Trump brothers’ travels over the previous 12 months present, international traders have been a significant goal for token gross sales.

Reuters interviewed half a dozen international crypto entrepreneurs who met with the Trump brothers. Five of them mentioned they sought out the youthful Trumps for enterprise alternatives due to their proximity to the 79-year-old president and hopes of cashing in on his political and monetary energy. For many different traders, the Trumps’ involvement signaled an opportunity to capitalize on the household’s title. Dorji Rabten’s Seoul-based enterprise funding agency, Oddiyana Ventures, purchased an undisclosed quantity of WLFI tokens in January. Rabten mentioned he by no means met the Trump sons, however the household’s involvement was central to his funding. “In the first very moment where we saw the project, we thought it’s going to be very huge, obviously, given the fact it’s a president’s sons taking up that project,” Rabten advised Reuters in September.

The alignment of the Trump household’s crypto initiatives with President Trump’s public function as overseer of U.S. crypto coverage constitutes a battle of curiosity unprecedented in fashionable presidential historical past, authorities ethics consultants mentioned.

“These people are not pouring money into coffers of the Trump family business because of the brothers’ acumen,” mentioned Washington University regulation professor Kathleen Clark, who makes a speciality of authorities ethics and was commenting on Reuters’ findings. “They are doing it because they want freedom from legal constraints and impunity that only the president can deliver.”

However, the ethicists mentioned, until the Trump brothers are explicitly promising entry to or favorable remedy from the president of their gross sales pitches, they’re breaking no legal guidelines. “It’s legal but unethical,” mentioned Richard Painter, who served as chief ethics lawyer for President George W. Bush and is now a professor on the University of Minnesota Law School.

None of the greater than a dozen folks Reuters spoke with who had met with the Trump brothers or their companions recounted any of them explicitly providing presidential entry or favors in return for investing of their household companies. The White House has repeatedly denied any battle of curiosity, saying that upon taking workplace, the president ended his involvement in his companies after putting them in a belief managed by his youngsters.

Still, as beneficiary of the belief that controls the Trump Organization, the president could have the cash the household is now making at his disposal when he leaves workplace.

A White House spokeswoman referred Reuters to the Trump Organization for remark. The Trump Organization’s chief authorized officer didn’t reply to a request for remark. Nor did Eric Trump or Donald Trump Jr.

Parlatore, the World Liberty lawyer, mentioned any suggestion that investments within the agency are motivated by a want to get nearer to President Trump “is a complete lie.” He identified that token purchases on secondary markets – versus direct purchases from the corporate – don’t profit the World Liberty workforce.

World Liberty advertises its plans on its web site – an app for making crypto deposits, for instance, and a crypto-backed borrowing facility. But for now, as a pure enterprise play in a crowded discipline, it has little to suggest it.

The enterprise has but to unveil what it heralded final 12 months as its core enterprise: a peer-to-peer financing platform able to difficult conventional banks. Since March, its management has actively promoted a stablecoin – a cryptocurrency whose worth is pegged to conventional property like {dollars} or gold – known as USD1. While the stablecoin’s title belongs to World Liberty, the coin is issued and supported by one other firm that pays World Liberty a share of the coin’s earnings. The coin’s circulation is dwarfed by that of market leaders.

Further, whereas WLFI holders can vote on restricted governance issues, the platform just isn’t designed to allow them to award themselves a share of earnings. That’s uncommon amongst peer-to-peer crypto lending platforms, based on two lecturers who research crypto markets and a Reuters overview of 4 of the biggest platforms’ phrases of enterprise.

In July, holders voted to permit buying and selling of the tokens on crypto exchanges. World Liberty later mentioned that solely early consumers can be allowed to promote, capped at not more than 20% of their tokens. After buying and selling started on September 1, the token value rose from an preliminary 31 cents to 46 cents after which sank about 65% three days later. It now trades at round 14 cents.

In his letter to Reuters, Parlatore mentioned broader adoption of the stablecoin and different World Liberty merchandise “directly benefits WLFI governance token holders through established mechanics, which, while complicated, are factual and already operational.” Asked for particulars of these mechanics and the way they might profit token holders, he mentioned in a subsequent letter: “Your proposed article is based entirely on false sources and a misinterpretation of basic principles.”

As just lately as 2021, Donald J. Trump, talking to Fox Business, criticized cryptocurrencies as a risk to U.S. greenback supremacy and mentioned bitcoin “seems like a scam.” Three years later, his tackle crypto had modified. Just weeks earlier than the November 2024 presidential election, he kicked off gross sales of World Liberty tokens with a social media put up: “This is YOUR chance to help shape the future of finance,” he wrote.

Since Trump’s second inauguration, his administration, reversing a lot of its predecessor’s positions, has been clearing the best way for the crypto trade’s progress within the U.S. The Justice Department axed its crypto enforcement workforce. Regulators scrapped steering warning banks to be cautious about crypto-related dangers. And the Securities and Exchange Commission has paused or dropped lawsuits in high-profile instances towards crypto corporations. For its half, World Liberty conveys the impression of a presidential connection. On the “Meet our team” part of its web site, the agency shows a portrait of President Trump, labeling him a “co-founder emeritus.” The different co-founder emeritus proven is Steven Witkoff, a billionaire actual property investor and President Trump’s particular envoy to the Middle East and for peace missions. (A small footnote says each males had been “removed upon taking office.”)

Don Jr., Eric and their youthful brother, Barron Trump, are introduced as co-founders, as are Witkoff’s two sons, Zach and Alex. Zach Witkoff has been a ubiquitous presence with the Trump brothers as they’ve traveled the globe to tout tokens.

“Without the Trump name, you wouldn’t see World Liberty Financial raising this kind of money,” mentioned Santa Clara University finance professor Seoyoung Kim, who makes a speciality of crypto analytics. Kim mentioned she noticed nothing of explicit worth within the applied sciences and companies introduced by World Liberty, describing its worth proposition as “being part of the club.”

The enterprise has reworked the Trump household’s wealth. Thanks to persevering with token gross sales, the Trumps’ crypto revenue is now approaching and will even exceed $1 billion.

In early August, for instance, about three weeks earlier than WLFI started buying and selling, a tiny Nasdaq-listed blockchain companies firm, Alt5 Sigma, mentioned it had raised $750 million from traders to assist purchase 7.5% of all World Liberty tokens. In company filings for the deal, Alt5 Sigma mentioned that the $750 million got here from institutional traders and that the majority of it was used to purchase tokens from World Liberty. Based on that info, the Trumps stood to realize about $500 million.

“It is an incredibly exciting time,” Eric Trump advised Fox Business on August 13, a day after the cope with Alt5 Sigma was finalized.

Since the deal was introduced, Alt5 Sigma’s share value has dropped by 75%. That decline didn’t have an effect on the money the Trumps have already constructed from the deal.

The Trumps’ money revenue from crypto doesn’t even embody the worth of the huge crypto property the household has amassed up to now 12 months.

Those property embody $TRUMP meme cash and World Liberty tokens the household nonetheless holds. They additionally embody shares in publicly listed Trump Media & Technology Group, which runs Trump’s social-media platform Truth Social and has expanded into crypto. These holdings are weak to wild value swings, are prone to value collapse if main holders promote, and will be topic to restrictions on gross sales and transfers. Nonetheless, they carry an estimated worth that – on paper, no less than – might add greater than $11 billion to the household’s fortune.

World Liberty started promoting WLFI tokens in October final 12 months to each U.S. and international traders. But preliminary gross sales within the U.S. had been gradual. SEC guidelines gave solely rich traders entry to the tokens, which shut out small retail consumers who might need needed to purchase them as supporters of the president, as they’ve carried out with scores of different merchandise licensed by the Trump Organization, from Trump-endorsed bibles to sneakers to electrical guitars.

Soon, as President-elect Trump’s second time period approached, World Liberty was prone to shedding entry to the international consumers who had been sustaining token gross sales. The household’s self-imposed moral pointers for Trump’s first time period prohibited them from in search of new enterprise exterior the U.S. Then, days earlier than his second inauguration, the Trump Organization launched revised pointers that jettisoned that constraint.

That labored. In a overview carried out for Reuters of the 50 wallets holding the biggest quantity of World Liberty tokens as of September 15, crypto analytics agency Nansen discovered that 36 wallets – with holdings valued at $804 million – had been seemingly related to abroad consumers. Only 4 wallets had been related to U.S. traders, amounting to $889 million. But most of that quantity, $781 million, was held by Alt5 Sigma; an extra $35 million was held by a World Liberty safety adviser. Nansen was unable to find out whether or not the remaining 10 wallets had been related to Americans or foreigners primarily based on blockchain knowledge on the time of study.

Parlatore, the World Liberty lawyer, mentioned that extra foreigners than Americans have purchased crypto as a result of there are extra of them, and that crypto has increased penetration charges exterior the U.S. He added: “It was basically harder to sell WLFI tokens to American investors, especially initially, as the rules were very restrictive in the last administration when the token sale began.” Among the biggest consumers of the tokens is Justin Sun, a Hong Kong-based crypto billionaire. The SEC in 2023 charged Sun with fraud, promoting unregistered crypto securities and hiding funds to celebrities to advertise his merchandise. With Trump again within the White House, the fee paused the case in February, simply weeks after Sun introduced he had elevated his complete purchases of World Liberty tokens to $75 million. Under the phrases of World Liberty’s money distribution settlement with its co-founders, Sun’s token purchases would have despatched $56 million to the Trump household.

Justin Sun didn’t reply to a request for remark. An SEC spokesperson declined to remark. The investigation stays paused.

Foreign pursuits juiced the Trump household’s revenue by way of the World Liberty USD1 stablecoin, too. In May, MGX, a state-controlled Abu Dhabi funding firm, used the coin to purchase a $2 billion fairness stake in Binance, the world’s largest crypto trade. The deal nonetheless accounts for three-quarters of all USD1 cash in circulation, although World Liberty has cited it as proof of “extraordinary, worldwide demand” for the stablecoin.

The board chairman of MGX is Sheikh Tahnoon bin Zayed Al Nahyan, the UAE’s nationwide safety adviser and a brother of UAE President Sheikh Mohamed bin Zayed. The $2 billion MGX paid to create the stablecoins is held in money equivalents reminiscent of U.S. Treasury securities. World Liberty says on its web site that these securities kick off curiosity funds to a few of its associates, together with one 38%-owned by the Trump Organization. That revenue stream of about $80 million yearly might yield thousands and thousands for the Trumps this 12 months, primarily based on Reuters calculations, although due to the dearth of public reporting, it’s not potential to know the ultimate determine.

The deal sparked criticism of what was broadly considered as an egregious battle of curiosity. Democratic Senators Elizabeth Warren and Jeff Merkley requested the Office of Government Ethics to launch an inquiry, warning that MGX’s buy utilizing the stablecoin “may violate the Emoluments Clause of the U.S. Constitution,” which prohibits officeholders from receiving funds or presents from international governments.

Eric Ueland, the Trump-appointed appearing head of the Office of Government Ethics, an unbiased company within the government department, didn’t reply to a request for remark. In response to a follow-up request to the ethics workplace’s spokesperson, Reuters acquired an automatic message: “Due to a lapse in appropriations,” a reference to the U.S. authorities shutdown, “I will be unable to process requests or respond to inquiries.”

An MGX spokesperson referred Reuters to a earlier assertion which mentioned the corporate selected USD1 after evaluating a number of stablecoins, “examining such factors as business suitability, the jurisdiction and currency of assets backing the stablecoin, and compliance history.” It famous that the stablecoin buy didn’t represent an funding in World Liberty and that MGX used the stablecoin to finish a transaction through which the vendor had requested use of cryptocurrency. MGX’s stablecoin funding additionally represented a turnabout for Binance within the U.S. – from prison convictions two years in the past to a job in a deal that financially advantages the U.S. president.

In late 2023, the trade pleaded responsible in federal courtroom to failing to keep up an efficient anti-money-laundering program and paid a penalty of $4.3 billion. Its billionaire founder, China-born Changpeng Zhao, served almost 4 months in jail after pleading responsible to the identical cost and stepped down as CEO, however stored his Binance stake.

In May, shortly after the announcement that MGX was utilizing the Trump stablecoin to put money into Binance, Zhao advised a podcaster that he had utilized for a pardon from the Trump administration however had by no means spoken to the president. Last week, the White House introduced that President Trump had pardoned Zhao, saying that the earlier administration of President Joe Biden “severely damaged the United States’ reputation as a global leader in technology and innovation.”

After the pardon was introduced, Zhao posted on social media that he was grateful to the president and would “do everything we can to help make America the Capital of Crypto.”

Reuters couldn’t decide whether or not World Liberty had any contact with Binance earlier than the latter accepted MGX’s funding utilizing USD1 stablecoins. The White House didn’t reply to Reuters’ questions on whether or not the stablecoin deal and Zhao’s pardon had been related.

MGX mentioned it “did not seek or receive assurances from any party outside the ordinary course of business for such a transaction.” The Trump household and its enterprise representatives didn’t reply to requests for remark.

Binance and Zhao didn’t reply to requests for remark. In a letter to Reuters earlier than the pardon was introduced, their attorneys mentioned Binance and Zhao are “clear” that they “conducted themselves entirely properly with regard to the MGX investment” and that “any suggestion that the MGX investment, or the use of USD1 for it, might in any way be linked to any request Mr Zhao might make for a Presidential pardon, would be wholly without foundation.” They mentioned their shoppers “did not control the payment method chosen by MGX for its investment in Binance.”

The notion that Trump household companies might present a path to the president was on show on April 27, when Donald Trump Jr. landed on the airport in Sofia, Bulgaria. He descended the steps from a Gulfstream enterprise jet to a pink carpet on the tarmac and was whisked away in an extended motorcade of black autos.

It wasn’t a state go to. It was a cease on a tour of Eastern European capitals the place Don Jr. attended a sequence of conferences titled “Trump Business Vision 2025.”

The Sofia occasion was sponsored by Nexo, a crypto agency primarily based within the Cayman Islands that left the U.S. market after the SEC fined it $45 million for providing an unregistered securities product. As the convention in Sofia acquired below means, Antoni Trenchev, Nexo’s co-founder and a former member of the Bulgarian National Assembly, joined Don Jr. on stage. During the occasion, Trenchev introduced that Nexo meant to renew operations within the U.S.

In a press release despatched to Reuters, Nexo mentioned the announcement “was not linked to Mr. Trenchev’s interactions with Donald Trump Jr. or the President of the United States.” The firm additionally mentioned it doesn’t have a confirmed timeline for returning to the U.S., however identified that “the regulatory environment has begun to shift.”

By early July, Nexo had strengthened its ties to the Trump household. That month, Nexo turned a lead sponsor of a golf championship held at a Trump-owned golf course close to Aberdeen, Scotland. A number of weeks later, President Trump hosted Trenchev over lunch at his Scottish golf resort, the place the 2 mentioned politics and their “joint vision for crypto in the U.S.” throughout a day on the hyperlinks, as Trenchev later posted on X with an image of him and the president.

“Thank you sincerely for what you are doing for all of us,” Trenchev wrote, tagging the U.S. president’s X deal with.

Nexo mentioned its sponsorship of the Scottish occasion was a part of a broader partnership with Europe’s main golf tour. The firm mentioned its monetary contribution to the partnership was eight figures however declined to be extra particular. It additionally mentioned it didn’t know what portion of its contribution, if any, would go to the Trump household.

A supply aware of the matter mentioned Nexo agreed to pay about $10 million below the three-year deal.

On May 1, 4 days after Don Jr. acquired a pink carpet welcome in Sofia, his brother Eric took the stage in Dubai with World Liberty co-founder Zach Witkoff at a crypto convention known as TOKEN2049. There, they introduced the MGX stablecoin deal and excoriated the standard banking system as antiquated and damaged. “We are going to transform the financial world,” Eric advised the group.

Acting as a moderator was Justin Sun. At the time, he was the biggest identified investor in World Liberty tokens. That would quickly change. Hours earlier than strolling on stage, Eric Trump had made his pitch for getting World Liberty tokens to Guren “Bobby” Zhou and some different crypto fans.

Zhou had just lately served as chairman of the UAE places of work of a British Virgin Islands-registered crypto agency known as Web3Port. He introduced with him to the assembly a checkered authorized historical past.

Before shifting to the UAE, Zhou lived in Britain, the place he was arrested in 2021 below suspicion of cash laundering, based on a February 2024 courtroom judgment in a separate case involving his UK immigration standing. The judgment says Zhou denied any wrongdoing. Britain’s National Crime Agency, which handed the case to prosecutors in 2022, confirmed to Reuters that Zhou stays below investigation.

Additionally, in three separate civil instances between 2017 and 2023, Zhou and a member of the family had been discovered by Chinese courts to have didn’t repay loans totaling 19.4 million yuan (about $2.4 million at present trade charges), based on courtroom judgments reviewed by Reuters. One of these judgments notes that Zhou failed to look in courtroom and was tried in absentia.

Zhou didn’t reply to requests for remark. The Aqua Labs assertion mentioned: “Any allegations of wrongdoing contained in recent media enquiries are entirely false. Mr Guren (“Bobby”) Zhou has by no means been convicted of any monetary crime in any jurisdiction, and any implication on the contrary is defamatory and false.”

Reuters couldn’t decide whether or not Eric Trump was conscious of these particulars when the 2 met. Parlatore, the World Liberty lawyer, famous that major gross sales of World Liberty tokens are topic to overview, however didn’t reply to questions concerning the distributors the corporate makes use of or what steps it takes past an preliminary verify of consumers’ identities.

About a month after Zhou met with Eric Trump, in mid-June, Web3Port’s BVI entities modified their names, adopting “Aqua1” rather than “Web3Port,” based on native authorities data. Just days later, on June 26, Aqua1 Foundation introduced its $100 million buy of World Liberty tokens.

Then, on June 30, the host of a livestream chat on X out of the UAE began speaking concerning the pleasure surrounding Aqua1. And “guess what,” the host mentioned, there was “a special guest from Aqua1 Foundation” on the road. That visitor was Zhou, who mentioned, “We’re very proud to be, you know, a major player in the World Liberty, which is Trump’s family’s crypto venture.”

(Reporting by David Gauthier-Villars in Dubai, Tom Bergin in London, Michelle Conlin in New York, Lawrence Delevingne in Boston and Tom Wilson in London. Additional reporting by Hadeel Al Sayegh and Federico Maccioni in Dubai and Francesco Guarascio in Hanoi. Edited by Tom Lasseter, Paritosh Bansal and John Blanton.)