Trump-backed World Liberty Financial is loading up on crypto. Here’s why

World Liberty Financial has made headlines for a recent crypto spending spree.

In December, it bought more than 4,000 AAVE tokens. On January 20, it purchased more than $90 million in wrapped Bitcoin and Ethereum. As recently as Thursday, it spent more than $400,000 on crypto issued by Ondo, one of the largest issuers of tokenized US Treasury bonds.

Speaking onstage at an Ondo-hosted conference in Manhattan that day, one of World Liberty’s co-founders said the splurge isn’t just another bet on crypto.

“One of the things that we’re going to launch here in the very short future is a strategic reserve,” World Liberty co-founder Chase Herro said in an atrium with an expansive view of Columbus Circle.

“We put a lot of money together,” Herro continued. “The idea is that we’re going to leave this onchain, and we’re going to show commitment back to the industry that’s been so good to us.”

How this stockpile will benefit the industry wasn’t clear. As of Friday, World Liberty had just $35 million in crypto, having apparently sold most of its $400 million stash just days earlier, according to data from Arkham.

But its planned launch is one of the few concrete details about World Liberty, a crypto company that launched four months ago with backing from Donald Trump, who is now president.

World Liberty is “leading a financial revolution by dismantling the stranglehold of traditional financial institutions,” its website says.

According to news reports and the company’s website, that includes releasing a stablecoin and simplifying access to decentralised finance protocols such as Aave.

Despite once being a crypto skeptic, Trump dipped his toes in the industry in 2022 when he released non-fungible tokens depicting him as a muscled superhero, a gun-bearing hunter, and other comic book-like images.

He dove in headfirst in September when his sons, Eric Trump and Donald Jr, unveiled World Liberty Financial.

Sales of its token, WLFI, got off to a rocky start but have since raised around $385 million.

Herro shared the stage Thursday with Donald Trump Jr, who said his family embraced crypto after being shunned by bankers in the wake of his father’s first presidential campaign.

“We had a hard time getting a loan,” he said. “Once that got turned off, you realize just how corrupted the system actually is.”

The Ondo Summit was billed as a conference for “the biggest names in traditional finance and blockchain.” Headline speakers include executives from BlackRock, Bank of New York Mellon, and Fidelity Investments.

But Trump Jr didn’t shy away from taking shots at Wall Street.

“They’ve essentially had a monopoly on all of this,” he said. “There’s a lot of middlemen in there that probably have no business being there. We’re going to force efficiency even in those traditional markets.”

Nevertheless, World Liberty’s co-founders described the business as a “bridge” between traditional and decentralised finance.

“We can’t expect the everyday person who’s just trying to go to their job, save some money, spend time with their family, to sit at home and nerd out and figure out seed phrases and wallet abstraction,” said World Liberty co-founder Zak Folkman.

What form that will take isn’t clear just yet. Aside from a potential integration with Aave, there have been few details about the primary World Liberty business, which has yet to launch.

But it isn’t being built for the risk-seeking gamblers often drawn to crypto, according to Folkman.

“You’re not going to get this welcome from this new crypto world when you have some amazing altcoin that goes to the moon and back down and just pounds on everybody who’s slow and lethargic, and they have a real job they’ve got to go to,” he said.

“But if you give them the checking account that’s earning 7, 8, 9, 10%, that’s backed by an Aave, that has abstractions to a debit card … it’s the same interaction, but at the end of the month, they get more.”

Aleks Gilbert is DL News’ New York-based DeFi correspondent. You can contact him at aleks@dlnews.com.