By Angus Berwick and Vicky Ge Huang

The Trump family engineered a new deal for its flagship crypto venture that stands to earn over half a billion dollars.

One unusual element: Trump-backed companies are on both sides of the deal.

Crypto has become the Trump family's dominant business interest, overshadowing the real-estate empire the president spent half a century developing.

At the center of those crypto riches is World Liberty Financial, the Trump-family vehicle launched last year. In a move earlier this month, World Liberty took over a pain --treatment-turned-payments firm , which then bought World Liberty's recently created cryptocurrency, according to public disclosures.

The publicly listed firm, Alt5 Sigma, sold shares and raised $750 million in cash from outside investors to buy World Liberty's cryptocurrency, dubbed WLFI. The deal will hand the Trump family a huge payday, around $500 million, since an entity it owns keeps up to three-quarters of any revenues from WLFI sales.

This sort of circular transaction -- with the same party as buyer and seller, dealing in products they themselves created -- is more common in the crypto world than in traditional finance.

Such deals often involve potential conflicts of interest and would have in the past drawn scrutiny from authorities, half a dozen former financial-market regulators said. As long as the companies disclose all relevant insider information for investors to judge the risks themselves, however, the deal likely complies with U.S. securities laws, they said.

"We are in strange and uncharted territory in the securities world. People are making investment decisions that they wouldn't make in other times," said Howard Fischer, a former senior trial counsel at the Securities and Exchange Commission during the Obama administration and the first Trump administration.

The transaction will take on greater importance when World Liberty launches trading of the WLFI digital currency, the crypto equivalent of an initial public offering. The trading debut of the currency, also known as a token, is scheduled for Monday.

The Trump family's WLFI holdings are valued at more than $6 billion on paper -- with President Trump holding two-thirds of these WLFI tokens personally, according to calculations based on futures prices on crypto exchanges, blockchain data and the president's personal financial disclosures.

The Trump family could in theory over time earn billions of dollars more from the public sale of the 33 billion WLFI tokens World Liberty itself holds, on top of the value of the tokens they keep for themselves. Only a small portion of the tokens will become tradable on Monday, and some insider holders aren't yet allowed to sell.

The family's overall wealth could change significantly when the WLFI token begins trading, with some crypto enthusiasts betting that the value of the Trump family's hoard will skyrocket.

To be sure, Trump tokens released earlier this year have, after initial jumps, plummeted. And cashing in on the crypto may also prove difficult, as even a small amount of selling can trigger prices to drop.

President Trump has other crypto assets. He controls stakes worth several billion dollars in $Trump coin, a so-called memecoin cryptocurrency, and in Trump Media, which runs his Truth Social platform and buys and holds cryptocurrencies.

Trump's erupting crypto wealth comes as his administration has instructed authorities to loosen the reins on crypto companies.

Spokespeople for World Liberty and Alt5 didn't return requests for comment.

White House press secretary Karoline Leavitt said that "neither the president nor his family have ever engaged, or will ever engage, in conflicts of interest."

All in the family

Trump announced World Liberty last September, saying it would help make "America Great Again, this time with crypto."

Trump and his family own about 40% of World Liberty itself. The company, privately held, hasn't disclosed its overall value. It runs a dollar-pegged cryptocurrency called USD1 and plans to roll out a mobile app for users to transact in crypto.

World Liberty began privately selling WLFI tokens last year, raising at least $650 million from investors, including Chinese crypto billionaire Justin Sun. WLFI is a so-called governance token that gives holders a vote on some of World Liberty's operations, though not a claim on its profits.

Morten Christensen, founder of crypto website AirdropAlert who bought what he called a substantial amount of WLFI tokens, is expecting the value to soar on Monday. He said he hopes the president tweets in support of the cryptocurrency once it becomes publicly tradable.

"It ticks all the boxes for a token to go up violently," he said.

World Liberty's takeover of the little-known Alt5 Sigma helped boost the value and the usage of WLFI ahead of its wider trading debut.

World Liberty executives said they became interested in Alt5 because it was one of only a few publicly listed crypto payment platforms and they planned to harness its e-commerce technology to grow USD1.

Until the middle of last year, Alt5 operated under the name JanOne and primarily offered recycling and pain-medication services. The company agreed to pay a fine that May to settle charges by the SEC, which accused JanOne of fraudulently inflating its income. The company didn't admit nor deny the allegations.

The same month, JanOne bought a crypto payments firm called Alt5 Sigma, whose name it took.

World Liberty paid for its stake in Alt5 shares with WLFI tokens, which the companies valued at $750 million.

Alt5 named World Liberty's co-founder and chief executive, Zach Witkoff, as chairman and Eric Trump to the board. Alt5 also agreed for World Liberty to nominate a new chief investment officer, the founder of a crypto company whose stated goal is to drive the adoption of USD1.

Eric Trump and Witkoff celebrated the deal on Aug. 13 by ringing the Nasdaq stock exchange's opening bell. Witkoff, son of presidential envoy Steve Witkoff, kicked off a speech on behalf of both companies.

Alt5, which has a market value of around $1 billion, said it would accumulate WLFI to pursue a so-called treasury strategy. This playbook was modeled on software company Strategy, formerly known as MicroStrategy, which has issued shares to fund the purchase of billions of dollars of bitcoin.

But unlike Strategy, which buys bitcoin on the open market, Alt5 is buying tokens from World Liberty, a related party that also controls the supply of the tokens.

Alt5 said it bought the WLFI tokens for 20 cents a piece, a 50% premium to the price World Liberty charged in a recent private sale to an outside investor, thereby boosting the total value of WLFI. Witkoff said after the deal was announced that 20 cents was a discount compared with the price implied by futures contracts tied to WLFI traded on crypto exchanges.

The practice used by the Trump family isn't unheard of in the crypto world. Justin Sun's blockchain firm Tron has partnered with an affiliated company to buy a cryptocurrency it issues.

Some former regulators are concerned that the opacity and insider transactions of these types of deals could leave investors vulnerable.

"This structure brings the worst practices of the crypto ecosystem into regulated public markets," said Corey Frayer, a former senior SEC official under the Biden administration who oversaw crypto policy.

'The right team'

After World Liberty took control of Alt5, the listed firm raised $750 million in cash from investors including Steve Cohen's hedge fund, Point72 Asset Management, and Soul Ventures, a Hong Kong-based family office.

Warren Hui, co-founder of Soul Ventures, which put in $85 million, said the firm viewed the investment as a bet on World Liberty's ability to grow into an industry leader.

"They are launching their product at the right time with the right team, " Hui said, noting the Trump sons' role. He called the price Alt5 paid for the WLFI tokens "fair."

In an extension of the circular transactions, World Liberty plans to use profits from its own stablecoin, USD1, to buy more WLFI, similar to a company buying back its own stock.

A developer working for World Liberty posted on X recently that this would create "permanent buying pressure."

Write to Angus Berwick at angus.berwick@wsj.com and Vicky Ge Huang at vicky.huang@wsj.com

(END) Dow Jones Newswires

August 31, 2025 05:00 ET (09:00 GMT)

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