- World Liberty Financial token boosts President's net worth.
- Analysts warn it could impede crypto market structure legislation.
- Not everyone is so pessimistic about the situation.
President Donald Trump’s net worth ballooned on paper by $4.1 billion on Monday after his family’s DeFi venture, World Liberty Financial, unleashed trading for its WLFI token.
That windfall could now hinder efforts to pass key crypto legislation, as it entwines the value of the president’s crypto holdings with industry regulation more than ever before, say analysts.
The WLFI token’s multi-billion dollar market value “turns a ‘crypto policy’ vote into an ‘enrich the president’s family vote,’” Sam Mudie, co-founder and CEO of Savea, a crypto platform for alternative investments, told DL News.
Mudie isn’t alone.
Several other analysts have warned that the situation will be politically challenging for Democratic senators who need to vote in favour of upcoming crypto market legislation for it to pass.
Broader scope
The Trump administration has spearheaded crypto regulation, a complete turnaround from the previous administration’s more hesitant stance.
In July, Trump signed the Genius Act into law, the first crypto bill in the US. The act sets rules and regulations for the issuers of US dollar-backed stablecoins, providing regulatory clarity.
The Genius Act received broad bipartisan support, something Mudie attributes to the act’s narrow scope targeting just stablecoins, and its consumer-protection narrative.
The coming crypto market structure bill is far broader.
“Democrats who voted for the Genius Act can plausibly say ‘stablecoins needed rules; market structure that looks like it benefits WLFI can wait,’” Mudie said.
“Expect efforts to narrow the bill and add conflict-of-interest provisions, or to punt until after the election cycle.”
The leading crypto market structure bill, the Clarity Act, passed a vote in the House of Representatives in July.
The Senate Banking Committee has also introduced a competing market structure bill called the Responsible Financial Innovation Act.
‘Open corruption’?
Democrats have howled about Trump’s crypto ties since he took office in January.
In May, US Representative Gerry Connolly characterised Trump’s crypto dealings as “open corruption,” and said Trump’s administration was rife with conflicts of interest.
The White House has said repeatedly that Trump’s assets are in a trust managed by his children and that there are no conflicts of interest.
The president’s crypto fortune includes non-fungible tokens, memecoins, and $60 million worth of World Liberty Financial’s USD1 stablecoin, in addition to his WLFI stash.
The paper value changes day by day, but Trump’s crypto holdings sit in the billions of dollars, exceeding the value of his real estate portfolio.
Many of his crypto assets are illiquid, however, and their true value is likely lower than it is on paper.
More bipartisan
Not everyone is so pessimistic about the situation.
“It is important to remember crypto legislation has gotten even more bipartisan over time, not less,” Ron Hammond, Head of Policy and Advocacy at Wintermute, a crypto market maker, told DL News.
Hammond said the bipartisan support is still poised to continue, despite the WLFI token boosting Trump’s crypto wealth.
Key Democratic Senators, such as Kirsten Gillibrand, Lisa Blunt Rochester, and Amy Klobuchar, are heavily involved in drafting market structure legislation alongside their Republican colleagues, Hammond said.
Lee Reiners, a lecturing fellow at Duke University and financial regulation expert, told DL News he doesn’t think Trump’s stash of WLFI tokens will matter either.
“The same concerns swirled around the Genius Act and enough Democrats voted for it,” he said.
Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.
