Former President Trump Pushes New Cryptocurrency Project, Raising Constitutional Concerns

Former President Trump Pushes New Cryptocurrency Project, Raising Constitutional ConcernsFormer US President Donald Trump has once again made headlines for his pro-cryptocurrency stance. WorldLibertyFinancial, a new cryptocurrency project backed by his family, officially unveiled details on Monday

Former President Trump Pushes New Cryptocurrency Project, Raising Constitutional Concerns

Former US President Donald Trump has once again made headlines for his pro-cryptocurrency stance. WorldLibertyFinancial, a new cryptocurrency project backed by his family, officially unveiled details on Monday. On Monday evening, September 16th, Eastern Time, Trump announced the project's launch on his social media platform X to over 90 million followers.

While Trump did not elaborate on the project during the live stream, merely making general remarks about the blockchain industry, the success of his own non-fungible tokens (NFTs), and the learning curve of cryptocurrencies, his endorsement was enough to draw attention.

For the past month, Trump and his family have been vaguely promoting WorldLibertyFinancial, promising that the project will do many things at once. At the end of last month, Trump posted on X that his plan would "ensure America becomes the global cryptocurrency capital," tagging a decentralized finance (DiFi) project called WorldLibertyFinancial. This is the project that Trump's son has been promoting recently.

On Monday evening, the WorldLibertyFinancial team introduced the project in a live stream on X, explaining that it would become a cryptocurrency banking platform encouraging the public to borrow, lend, and invest in cryptocurrencies. The platform will launch a corresponding token called WLFI. ZakFolkman of WorldLibertyFinancial said the equity structure of the WLFI token would be as follows: 20% of the project tokens would be allocated to the founding team, including the Trump family; 17% would be reserved for user rewards; and the remaining 63% would be available for public purchase. The token will not be presold.

However, a previously leaked draft outline of the WorldLibertyFinancial project revealed that the founders hold a staggering 70% stake, raising concerns that the project is merely a scheme to make a quick buck.

Trump's stance on cryptocurrency marks a 180-degree shift from his past. During his presidency, he had dismissed cryptocurrencies as criminal scams. Now, his positive attitude towards the cryptocurrency industry has prompted some industry executives, including venture capitalists Marc Andreessen and Ben Horowitz, to support him.

At the Bitcoin2024 conference at the end of July, Trump made a series of eye-catching promises to the cryptocurrency community, such as making the US the first country to list Bitcoin as a strategic reserve asset; firing the current US Securities and Exchange Commission (SEC) chair, who is seen as hostile towards the cryptocurrency industry; establishing a presidential advisory committee on Bitcoin and cryptocurrencies; and encouraging power plants to enhance electricity supply for Bitcoin mining.

During the live stream on X on Monday, Trump also mentioned his transformation. He claimed to be initially "not very interested" in cryptocurrencies, but when his NFT collection sales used cryptocurrency payments, "I felt like my kids opened my eyes tremendously." He concluded his speech by saying: "Crypto is one of the things we have to do. Whether we like it or not, we have to do it."

On Monday evening, following his father's endorsement, Donald Trump Jr. stated that banking has "become politicized" and DiFi "removes the politics."

DiFi is considered a branch of the cryptocurrency realm. While traditional financial systems are centralized, DiFi, as the name suggests, offers a decentralized alternative, using public blockchain networks for transactions and replacing centralized service providers such as custodians, central clearinghouses, or depositaries with so-called smart contracts. Smart contracts are instructions in the form of computer code. This code is stored on a public blockchain and executed as part of the system's consensus rules. DiFi proponents argue that such projects will lead to financial democratization.

However, some commentators point out that Trump appears to be leveraging the attention he garnered from his presidential campaign to promote new business ventures, and WorldLibertyFinancial could potentially raise constitutional concerns about his actions. The US Constitution stipulates that the president cannot receive compensation from foreign governments without congressional permission, including money or valuables. If the project's profits flow into Trump's hands from sources prohibited by the Constitution, it would raise constitutional issues.

Trump's latest move has once again drawn attention to the cryptocurrency industry and the potential risks associated with political figures' involvement. Whether the WorldLibertyFinancial project succeeds and whether Trump will trigger a constitutional dispute as a result remain key focal points to watch in the coming period.