- World Liberty Financial treasury company ALT5 values WLFI tokens at $0.20 apiece in share acquisition deal.
- It's the first time the token has received a value since its launch.
World Liberty Financial’s deal with ALT5 Sigma Corporation has put a value on WLFI, the Trump-backed DeFi project’s token, for the first time since its sale last year.
On Monday, ALT5 announced plans to pivot to become a so-called crypto treasury company, selling 200,000 new shares and using the proceeds to buy up the $1.5 billion worth of WLFI.
The firm will swap half of the newly-issued shares directly for WLFI held by World Liberty Financial in a deal that values the token at $0.20, Matt Morgan, ALT5’s chief investment officer, told DL News.
It’s not clear if World Liberty Financial is the only participant swapping WLFI tokens for shares. The firm said that several other unnamed institutional investors and venture capital firms participated in the share sale.
It’s the first time that WLFI has received a valuation since World Liberty Financial sold $550 million worth tokens to investors between October and March. At the time, investors paid varying prices for WLFI depending on how early in the sale they bought it.
Large WLFI holders include Tron founder Justin Sun, who bought $75 million worth during the token sale.
On its launch, WLFI was programmed so that buyers couldn’t trade it, meaning that there was no way for the market to value the token.
Conflict of interest
The deal also highlights the growing crypto treasury company trend.
Michael Saylor’s Strategy was a trailblazer in this regard. The firm has issued debt or shares to buy Bitcoin since 2020, a ploy which has seen its shares skyrocket by over 3,500% since.
Over the past year, a new wave of crypto treasury companies have copied Saylor’s playbook on the back of a favourable crypto regulatory environment under the Trump administration.
Many of these companies issue debt or shares to buy up their cryptocurrency of choice, and often emerge through reverse mergers with struggling publicly traded companies.
Sometimes there’s a conflict of interest between the treasury companies and the issuers of the crypto asset they buy.
Tron Inc, a crypto treasury company that says it will buy up TRX, the native token of the Tron blockchain, has Weike Sun on its board, the father of Justin Sun. The firm listed the father-son relationship among its potential conflicts of interest in its S-3 filing last month.
As a part of ALT5’s crypto treasury swerve, the firm added several World Liberty Financial executives and backers to its board of directors. They include World Liberty Financial CEO Zach Witkoff, the project’s COO Zak Folkman, and Eric Trump, President Donald Trump’s son.
All three new appointees hold WLFI and therefore have a financial interest in the token’s value.
Morgan said he’s not at liberty to comment on matters that may involve commercially sensitive information relating to his role or ALT5 when asked about the potential conflict of interest of the board appointments.
Trading the token
The WLFI token is designed to govern World Liberty Financial. Those who hold the token can vote on changes to the protocol, its creators said.
The project makes clear that it isn’t a decentralised autonomous organisation, a type of crypto collective popular among DeFi projects.
In July, WLFI holders voted to make the token tradable after the question was put to them by the project’s creators.
World Liberty Financial said in an X post that the token could begin trading as soon as the end of August.
Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.
