Inside The Trump Household’s World Money Machine

DUBAI, Oct 28 (Reuters) – Eric Trump was in Dubai on household enterprise. Assembly with a Chinese language businessman and his associates on the sidelines of a cryptocurrency convention in Could this yr, the son of U.S. President Donald J. Trump ran by means of his typical speaking factors concerning the inefficiency of conventional banks and his personal well-known father’s run-ins with financiers.

Then got here the pitch. Purchase at the least $20 million of “governance tokens” within the Trump household’s crypto enterprise, World Liberty Monetary, and turn into a part of a enterprise that Eric Trump predicted would quickly embody the way forward for finance in America, in accordance with an individual acquainted with the assembly.

To some in that small gathering, the know-how Eric Trump’s staff described for World Liberty appeared “rudimentary,” the individual stated. On the time, World Liberty was a fledgling enterprise. It hadn’t but created the cryptocurrency-based finance platform it promised after its September 2024 launch. It nonetheless hasn’t.

Even so, the pitch apparently labored. On June 26, an obscure entity referred to as Aqua1 Basis, which stated it was primarily based within the United Arab Emirates, introduced it was shopping for $100 million of cryptocurrency tokens from World Liberty. It was the one largest recognized buy of the so-called WLFI tokens on the time.

The Chinese language businessman who met with Eric Trump in Dubai was Guren “Bobby” Zhou, who has government roles in a number of companies and who’s beneath investigation in Britain for cash laundering, in accordance with that nation’s Nationwide Crime Company and a doc filed in an immigration case at London’s Royal Courts of Justice.

Zhou didn’t reply on to requests for remark for this text. In an announcement emailed to Reuters, an entity calling itself Aqua Labs Funding LLC stated Zhou was its co-founder and described itself as an Abu Dhabi entity of Aqua1 Basis. The assertion stated Aqua1 Basis’s funding in World Liberty tokens “was a commercial decision consistent with its focus on advancing regulated, scalable digital-asset ecosystems.” Zhou’s relationship to Aqua1 Basis has not been beforehand reported.

Aqua1 Basis didn’t reply to requests for remark. Nor did Eric Trump.

The Dubai assembly, reported right here for the primary time, was only one cease on a globetrotting funding roadshow the 2 elder sons of President Trump – Eric and Donald Trump Jr. – launched into across the time of their father’s election to a second time period. In Europe, the Center East and Asia, they’ve been selling World Liberty and different ventures that funnel buyers’ money to Trump household companies, recognized collectively because the Trump Group. The Trump brothers’ efforts have been a whopping success. Within the first half of this yr, the Trump Group’s revenue soared 17-fold to $864 million from $51 million a yr earlier, in accordance with Reuters calculations primarily based on the president’s official disclosures, property information, monetary information launched in court docket circumstances, crypto commerce data and different sources. Of the first-half complete, $802 million – greater than 90% – got here from Trump crypto ventures, together with gross sales of World Liberty tokens.

That $864 million payday represents precise revenue – money flowing, free and clear, into Trump household coffers. Reuters’ calculations had been reviewed by half a dozen crypto and actual property consultants and an authorized accountant who has studied the U.S. Inner Income Service’s method to crypto.

The Trumps’ first-half crypto revenue dwarfed what the household earned from its conventional companies – $33 million from the president’s golf golf equipment and resorts and $23 million for licensing his title to abroad actual property builders, in accordance with the Reuters estimates. Greater than half the Trumps’ revenue – $463 million – got here from gross sales of World Liberty tokens alone, together with as much as $75 million from Aqua1’s token buy. On its web site, World Liberty says a Trump Group entity receives 75% of the income from the token gross sales by means of its affiliation with World Liberty. The household additionally made $336 million from gross sales of a Trump meme coin, $TRUMP, Reuters calculated, utilizing assumptions vetted by 5 analysts. Resulting from a scarcity of transparency within the Trump meme coin enterprise, estimates of revenue from the cash carry a better diploma of uncertainty than these for WLFI token gross sales. The Trumps are minting a trove of exhausting money from digital property backed, thus far, by little greater than the Trump title. World Liberty tokens, like most crypto merchandise, are registered on digital ledgers referred to as blockchains. However WLFI tokens provide holders little past a restricted say within the enterprise’s plans, in contrast to governance tokens for related tasks. And meme cash just like the $TRUMP coin are primarily collectibles whose worth displays the recognition of the web joke, meme or character related to them.

World Liberty Monetary didn’t reply on to requests for remark for this text. In a letter to Reuters, Timothy Parlatore, a lawyer for the corporate, stated: “WLFI tokens are not securities; they are digital assets with real utility, including governance rights that benefit holders as the platform grows.” He additionally stated: “The Alleged Valuation and Income Analysis of WLFI Is Inaccurate and Misleading.”

In a subsequent e mail, Parlatore declined to offer additional specifics on the advantages to holders of World Liberty governance tokens or his critique of the Reuters evaluation.

The leap within the Trumps’ revenue represents “a massive pivot” for the household enterprise, stated Carter Davis, an assistant professor of finance at The Ohio State College who has studied cryptocurrency pricing and who reviewed the Reuters calculations. “Even if you go through and you do the most conservative estimate…it’s pretty wild that you end up with such a huge fraction of the income coming from crypto.”

The identities of most patrons of the WLFI tokens are hidden behind opaque “wallet” addresses – the distinctive identifiers buyers use as keys to entry and handle their holdings. Among the many few main patrons whose identities are recognized – a mixture of international and U.S. buyers – most have histories of authorized and regulatory entanglements associated to their enterprise endeavors. And because the Trump brothers’ travels over the previous yr present, international buyers have been a serious goal for token gross sales.

Reuters interviewed half a dozen international crypto entrepreneurs who met with the Trump brothers. 5 of them stated they sought out the youthful Trumps for enterprise alternatives due to their proximity to the 79-year-old president and hopes of cashing in on his political and monetary energy. For a lot of different buyers, the Trumps’ involvement signaled an opportunity to capitalize on the household’s title. Dorji Rabten’s Seoul-based enterprise funding agency, Oddiyana Ventures, purchased an undisclosed quantity of WLFI tokens in January. Rabten stated he by no means met the Trump sons, however the household’s involvement was central to his funding. “In the first very moment where we saw the project, we thought it’s going to be very huge, obviously, given the fact it’s a president’s sons taking up that project,” Rabten instructed Reuters in September.

The alignment of the Trump household’s crypto initiatives with President Trump’s public function as overseer of U.S. crypto coverage constitutes a battle of curiosity unprecedented in fashionable presidential historical past, authorities ethics consultants stated.

“These people are not pouring money into coffers of the Trump family business because of the brothers’ acumen,” stated Washington College legislation professor Kathleen Clark, who makes a speciality of authorities ethics and was commenting on Reuters’ findings. “They are doing it because they want freedom from legal constraints and impunity that only the president can deliver.”

Nonetheless, the ethicists stated, until the Trump brothers are explicitly promising entry to or favorable remedy from the president of their gross sales pitches, they’re breaking no legal guidelines. “It’s legal but unethical,” stated Richard Painter, who served as chief ethics lawyer for President George W. Bush and is now a professor on the College of Minnesota Regulation College.

Not one of the greater than a dozen folks Reuters spoke with who had met with the Trump brothers or their companions recounted any of them explicitly providing presidential entry or favors in return for investing of their household companies. The White Home has repeatedly denied any battle of curiosity, saying that upon taking workplace, the president ended his involvement in his companies after putting them in a belief managed by his youngsters.

Nonetheless, as beneficiary of the belief that controls the Trump Group, the president can have the cash the household is now making at his disposal when he leaves workplace.

A White Home spokeswoman referred Reuters to the Trump Group for remark. The Trump Group’s chief authorized officer didn’t reply to a request for remark. Nor did Eric Trump or Donald Trump Jr.

Parlatore, the World Liberty lawyer, stated any suggestion that investments within the agency are motivated by a want to get nearer to President Trump “is a complete lie.” He identified that token purchases on secondary markets – versus direct purchases from the corporate – don’t profit the World Liberty staff.

World Liberty advertises its plans on its web site – an app for making crypto deposits, for instance, and a crypto-backed borrowing facility. However for now, as a pure enterprise play in a crowded area, it has little to advocate it.

The enterprise has but to unveil what it heralded final yr as its core enterprise: a peer-to-peer financing platform able to difficult conventional banks. Since March, its management has actively promoted a stablecoin – a cryptocurrency whose worth is pegged to conventional property like {dollars} or gold – referred to as USD1. Whereas the stablecoin’s title belongs to World Liberty, the coin is issued and supported by one other firm that pays World Liberty a share of the coin’s earnings. The coin’s circulation is dwarfed by that of market leaders.

Additional, whereas WLFI holders can vote on restricted governance issues, the platform will not be designed to allow them to award themselves a share of earnings. That’s uncommon amongst peer-to-peer crypto lending platforms, in accordance with two teachers who examine crypto markets and a Reuters evaluation of 4 of the most important platforms’ phrases of enterprise.

In July, holders voted to permit buying and selling of the tokens on crypto exchanges. World Liberty later stated that solely early patrons could be allowed to promote, capped at not more than 20% of their tokens. After buying and selling started on September 1, the token worth rose from an preliminary 31 cents to 46 cents after which sank about 65% three days later. It now trades at round 14 cents.

In his letter to Reuters, Parlatore stated broader adoption of the stablecoin and different World Liberty merchandise “directly benefits WLFI governance token holders through established mechanics, which, while complicated, are factual and already operational.” Requested for particulars of these mechanics and the way they might profit token holders, he stated in a subsequent letter: “Your proposed article is based entirely on false sources and a misinterpretation of basic principles.”

As just lately as 2021, Donald J. Trump, talking to Fox Business, criticized cryptocurrencies as a risk to U.S. greenback supremacy and stated bitcoin “seems like a scam.” Three years later, his tackle crypto had modified. Simply weeks earlier than the November 2024 presidential election, he kicked off gross sales of World Liberty tokens with a social media publish: “This is YOUR chance to help shape the future of finance,” he wrote.

Since Trump’s second inauguration, his administration, reversing lots of its predecessor’s positions, has been clearing the best way for the crypto trade’s development within the U.S. The Justice Division axed its crypto enforcement staff. Regulators scrapped steerage warning banks to be cautious about crypto-related dangers. And the Securities and Alternate Fee has paused or dropped lawsuits in high-profile circumstances in opposition to crypto companies. For its half, World Liberty conveys the impression of a presidential connection. On the “Meet our team” part of its web site, the agency shows a portrait of President Trump, labeling him a “co-founder emeritus.” The opposite co-founder emeritus proven is Steven Witkoff, a billionaire actual property investor and President Trump’s particular envoy to the Center East and for peace missions. (A small footnote says each males had been “removed upon taking office.”)

Don Jr., Eric and their youthful brother, Barron Trump, are offered as co-founders, as are Witkoff’s two sons, Zach and Alex. Zach Witkoff has been a ubiquitous presence with the Trump brothers as they’ve traveled the globe to tout tokens.

“Without the Trump name, you wouldn’t see World Liberty Financial raising this kind of money,” stated Santa Clara College finance professor Seoyoung Kim, who makes a speciality of crypto analytics. Kim stated she noticed nothing of specific worth within the applied sciences and companies introduced by World Liberty, describing its worth proposition as “being part of the club.”

The enterprise has remodeled the Trump household’s wealth. Due to persevering with token gross sales, the Trumps’ crypto revenue is now approaching and will even exceed $1 billion.

In early August, for instance, about three weeks earlier than WLFI started buying and selling, a tiny Nasdaq-listed blockchain companies firm, Alt5 Sigma, stated it had raised $750 million from buyers to assist purchase 7.5% of all World Liberty tokens. In company filings for the deal, Alt5 Sigma stated that the $750 million got here from institutional buyers and that the majority of it was used to purchase tokens from World Liberty. Primarily based on that data, the Trumps stood to realize about $500 million.

“It is an incredibly exciting time,” Eric Trump instructed Fox Business on August 13, a day after the take care of Alt5 Sigma was finalized.

For the reason that deal was introduced, Alt5 Sigma’s share worth has dropped by 75%. That decline didn’t have an effect on the money the Trumps have already created from the deal.

The Trumps’ money revenue from crypto doesn’t even embrace the worth of the huge crypto property the household has amassed previously yr.

These property embrace $TRUMP meme cash and World Liberty tokens the household nonetheless holds. Additionally they embrace shares in publicly listed Trump Media & Know-how Group, which runs Trump’s social-media platform Reality Social and has expanded into crypto. These holdings are susceptible to wild worth swings, are liable to worth collapse if main holders promote, and may be topic to restrictions on gross sales and transfers. Nonetheless, they carry an estimated worth that – on paper, at the least – might add greater than $11 billion to the household’s fortune.

World Liberty started promoting WLFI tokens in October final yr to each U.S. and international buyers. However preliminary gross sales within the U.S. had been sluggish. SEC guidelines gave solely rich buyers entry to the tokens, which shut out small retail patrons who might need needed to purchase them as supporters of the president, as they’ve finished with scores of different merchandise licensed by the Trump Group, from Trump-endorsed bibles to sneakers to electrical guitars.

Quickly, as President-elect Trump’s second time period approached, World Liberty was liable to dropping entry to the international patrons who had been sustaining token gross sales. The household’s self-imposed moral tips for Trump’s first time period prohibited them from searching for new enterprise exterior the U.S. Then, days earlier than his second inauguration, the Trump Group launched revised tips that jettisoned that constraint.

That labored. In a evaluation performed for Reuters of the 50 wallets holding the most important quantity of World Liberty tokens as of September 15, crypto analytics agency Nansen discovered that 36 wallets – with holdings valued at $804 million – had been possible linked to abroad patrons. Solely 4 wallets had been linked to U.S. buyers, amounting to $889 million. However most of that quantity, $781 million, was held by Alt5 Sigma; a further $35 million was held by a World Liberty safety adviser. Nansen was unable to find out whether or not the remaining 10 wallets had been linked to Individuals or foreigners primarily based on blockchain information on the time of study.

Parlatore, the World Liberty lawyer, stated that extra foreigners than Individuals have purchased crypto as a result of there are extra of them, and that crypto has greater penetration charges exterior the U.S. He added: “It was basically harder to sell WLFI tokens to American investors, especially initially, as the rules were very restrictive in the last administration when the token sale began.” Among the many largest patrons of the tokens is Justin Solar, a Hong Kong-based crypto billionaire. The SEC in 2023 charged Solar with fraud, promoting unregistered crypto securities and hiding funds to celebrities to advertise his merchandise. With Trump again within the White Home, the fee paused the case in February, simply weeks after Solar introduced he had elevated his complete purchases of World Liberty tokens to $75 million. Below the phrases of World Liberty’s money distribution settlement with its co-founders, Solar’s token purchases would have despatched $56 million to the Trump household.

Justin Solar didn’t reply to a request for remark. An SEC spokesperson declined to remark. The investigation stays paused.

International pursuits juiced the Trump household’s revenue by means of the World Liberty USD1 stablecoin, too. In Could, MGX, a state-controlled Abu Dhabi funding firm, used the coin to purchase a $2 billion fairness stake in Binance, the world’s largest crypto trade. The deal nonetheless accounts for three-quarters of all USD1 cash in circulation, although World Liberty has cited it as proof of “extraordinary, worldwide demand” for the stablecoin.

The board chairman of MGX is Sheikh Tahnoon bin Zayed Al Nahyan, the UAE’s nationwide safety adviser and a brother of UAE President Sheikh Mohamed bin Zayed. The $2 billion MGX paid to create the stablecoins is held in money equivalents corresponding to U.S. Treasury securities. World Liberty says on its web site that these securities kick off curiosity funds to a few of its associates, together with one 38%-owned by the Trump Group. That revenue stream of about $80 million yearly might yield thousands and thousands for the Trumps this yr, primarily based on Reuters calculations, although due to the shortage of public reporting, it’s not potential to know the ultimate determine.

The deal sparked criticism of what was broadly seen as an egregious battle of curiosity. Democratic Senators Elizabeth Warren and Jeff Merkley requested the Workplace of Authorities Ethics to launch an inquiry, warning that MGX’s buy utilizing the stablecoin “may violate the Emoluments Clause of the U.S. Constitution,” which prohibits officeholders from receiving funds or presents from international governments.

Eric Ueland, the Trump-appointed appearing head of the Workplace of Authorities Ethics, an unbiased company within the government department, didn’t reply to a request for remark. In response to a follow-up request to the ethics workplace’s spokesperson, Reuters acquired an automatic message: “Due to a lapse in appropriations,” a reference to the U.S. authorities shutdown, “I will be unable to process requests or respond to inquiries.”

An MGX spokesperson referred Reuters to a earlier assertion which stated the corporate selected USD1 after evaluating a number of stablecoins, “examining such factors as business suitability, the jurisdiction and currency of assets backing the stablecoin, and compliance history.” It famous that the stablecoin buy didn’t represent an funding in World Liberty and that MGX used the stablecoin to finish a transaction through which the vendor had requested use of cryptocurrency. MGX’s stablecoin funding additionally represented a turnabout for Binance within the U.S. – from legal convictions two years in the past to a task in a deal that financially advantages the U.S. president.

In late 2023, the trade pleaded responsible in federal court docket to failing to keep up an efficient anti-money-laundering program and paid a penalty of $4.3 billion. Its billionaire founder, China-born Changpeng Zhao, served practically 4 months in jail after pleading responsible to the identical cost and stepped down as CEO, however stored his Binance stake.

In Could, shortly after the announcement that MGX was utilizing the Trump stablecoin to put money into Binance, Zhao instructed a podcaster that he had utilized for a pardon from the Trump administration however had by no means spoken to the president. Final week, the White Home introduced that President Trump had pardoned Zhao, saying that the earlier administration of President Joe Biden “severely damaged the United States’ reputation as a global leader in technology and innovation.”

After the pardon was introduced, Zhao posted on social media that he was grateful to the president and would “do everything we can to help make America the Capital of Crypto.”

Reuters couldn’t decide whether or not World Liberty had any contact with Binance earlier than the latter accepted MGX’s funding utilizing USD1 stablecoins. The White Home didn’t reply to Reuters’ questions on whether or not the stablecoin deal and Zhao’s pardon had been linked.

MGX stated it “did not seek or receive assurances from any party outside the ordinary course of business for such a transaction.” The Trump household and its enterprise representatives didn’t reply to requests for remark.

Binance and Zhao didn’t reply to requests for remark. In a letter to Reuters earlier than the pardon was introduced, their legal professionals stated Binance and Zhao are “clear” that they “conducted themselves entirely properly with regard to the MGX investment” and that “any suggestion that the MGX investment, or the use of USD1 for it, might in any way be linked to any request Mr Zhao might make for a Presidential pardon, would be wholly without foundation.” They stated their shoppers “did not control the payment method chosen by MGX for its investment in Binance.”

The notion that Trump household companies might present a path to the president was on show on April 27, when Donald Trump Jr. landed on the airport in Sofia, Bulgaria. He descended the steps from a Gulfstream enterprise jet to a pink carpet on the tarmac and was whisked away in an extended motorcade of black autos.

It wasn’t a state go to. It was a cease on a tour of Japanese European capitals the place Don Jr. attended a sequence of conferences titled “Trump Business Vision 2025.”

The Sofia occasion was sponsored by Nexo, a crypto agency primarily based within the Cayman Islands that left the U.S. market after the SEC fined it $45 million for providing an unregistered securities product. Because the convention in Sofia bought beneath method, Antoni Trenchev, Nexo’s co-founder and a former member of the Bulgarian Nationwide Meeting, joined Don Jr. on stage. Throughout the occasion, Trenchev introduced that Nexo meant to renew operations within the U.S.

In an announcement despatched to Reuters, Nexo stated the announcement “was not linked to Mr. Trenchev’s interactions with Donald Trump Jr. or the President of the United States.” The corporate additionally stated it doesn’t have a confirmed timeline for returning to the U.S., however identified that “the regulatory environment has begun to shift.”

By early July, Nexo had strengthened its ties to the Trump household. That month, Nexo turned a lead sponsor of a golf championship held at a Trump-owned golf course close to Aberdeen, Scotland. A number of weeks later, President Trump hosted Trenchev over lunch at his Scottish golf resort, the place the 2 mentioned politics and their “joint vision for crypto in the U.S.” throughout a day on the hyperlinks, as Trenchev later posted on X with an image of him and the president.

“Thank you sincerely for what you are doing for all of us,” Trenchev wrote, tagging the U.S. president’s X deal with.

Nexo stated its sponsorship of the Scottish occasion was a part of a broader partnership with Europe’s main golf tour. The corporate stated its monetary contribution to the partnership was eight figures however declined to be extra particular. It additionally stated it didn’t know what portion of its contribution, if any, would go to the Trump household.

A supply acquainted with the matter stated Nexo agreed to pay about $10 million beneath the three-year deal.

On Could 1, 4 days after Don Jr. acquired a pink carpet welcome in Sofia, his brother Eric took the stage in Dubai with World Liberty co-founder Zach Witkoff at a crypto convention referred to as TOKEN2049. There, they introduced the MGX stablecoin deal and excoriated the standard banking system as antiquated and damaged. “We are going to transform the financial world,” Eric instructed the gang.

Appearing as a moderator was Justin Solar. On the time, he was the most important recognized investor in World Liberty tokens. That may quickly change. Hours earlier than strolling on stage, Eric Trump had made his pitch for purchasing World Liberty tokens to Guren “Bobby” Zhou and some different crypto fanatics.

Zhou had just lately served as chairman of the UAE workplaces of a British Virgin Islands-registered crypto agency referred to as Web3Port. He introduced with him to the assembly a checkered authorized historical past.

Earlier than shifting to the UAE, Zhou lived in Britain, the place he was arrested in 2021 beneath suspicion of cash laundering, in accordance with a February 2024 court docket judgment in a separate case involving his UK immigration standing. The judgment says Zhou denied any wrongdoing. Britain’s Nationwide Crime Company, which handed the case to prosecutors in 2022, confirmed to Reuters that Zhou stays beneath investigation.

Moreover, in three separate civil circumstances between 2017 and 2023, Zhou and a member of the family had been discovered by Chinese language courts to have didn’t repay loans totaling 19.4 million yuan (about $2.4 million at present trade charges), in accordance with court docket judgments reviewed by Reuters. A kind of judgments notes that Zhou failed to seem in court docket and was tried in absentia.

Zhou didn’t reply to requests for remark. The Aqua Labs assertion stated: “Any allegations of wrongdoing contained in recent media enquiries are entirely false. Mr Guren (“Bobby”) Zhou has by no means been convicted of any monetary crime in any jurisdiction, and any implication on the contrary is defamatory and false.”

Reuters couldn’t decide whether or not Eric Trump was conscious of these particulars when the 2 met. Parlatore, the World Liberty lawyer, famous that main gross sales of World Liberty tokens are topic to evaluation, however didn’t reply to questions concerning the distributors the corporate makes use of or what steps it takes past an preliminary examine of patrons’ identities.

A couple of month after Zhou met with Eric Trump, in mid-June, Web3Port’s BVI entities modified their names, adopting “Aqua1” instead of “Web3Port,” in accordance with native authorities information. Simply days later, on June 26, Aqua1 Basis introduced its $100 million buy of World Liberty tokens.

Then, on June 30, the host of a livestream chat on X out of the UAE began speaking concerning the pleasure surrounding Aqua1. And “guess what,” the host stated, there was “a special guest from Aqua1 Foundation” on the road. That visitor was Zhou, who stated, “We’re very proud to be, you know, a major player in the World Liberty, which is Trump’s family’s crypto venture.”

(Reporting by David Gauthier-Villars in Dubai, Tom Bergin in London, Michelle Conlin in New York, Lawrence Delevingne in Boston and Tom Wilson in London. Further reporting by Hadeel Al Sayegh and Federico Maccioni in Dubai and Francesco Guarascio in Hanoi. Edited by Tom Lasseter, Paritosh Bansal and John Blanton.)