Trump’s WLFI partners abandoned a hacked crypto DEX, pocketing millions instead of reimbursing its victims.
The Trump family’s crypto ventures are once again under scrutiny due to their associations with unsavory characters. On Monday, May 19, Reuters released a report about World Liberty Financial partners’ past mismanagement of a since-abandoned crypto exchange.
Zak Folkman and Chase Herro, two key figures in WLFI, were also founders of Dough Finance, a controversial platform that enabled heavily leveraged crypto trades. The platform suffered a devastating hack in July 2024, resulting in $2.5 million in user losses.
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Folkman and Herro acknowledged that the breach stemmed from a critical vulnerability in their code and initially pledged to compensate victims. However, just two months later, the pair launched WLFI alongside Donald Trump’s sons Don Jr., Eric, and Barron.
Folkman and Herro are now facing a lawsuit related to Dough Finance. Notably, one investor, Jonathan Lopez, reportedly lost $1 million worth of crypto in the hack.
Trump’s WLFI under fire over its associations
Despite the controversy and ongoing lawsuit, WLFI has continued to back Folkman and Herro. In an emailed statement, Eric Trump, executive vice president at WLFI, defended the pair and praised their performance.
“We are proud of the entire team. They have overachieved our wildest goals and our current trajectory is nothing short of incredible.” Eric Trump, WLFI.
Folkman and Herro are not the only contentious figures linked to WLFI. Tron founder Justin Sun joined the venture as an advisor in December 2024 after investing $30 million in the firm. Sun has long been a controversial figure and has previously faced several investigations by the Securities and Exchange Commission.
Since Sun became a WLFI advisor, the SEC dropped its investigations of Sun’s sale of BitTorrent and Rainberry tokens. This prompted Democrat legislators to demand an investigation into Trump’s crypto ventures.
Read more: Senate crypto bill collapses: Is partisan divide or Trump’s digital fortune to blame?
