Corporate filings reveal that in 2025, World Liberty Financial entered into a cryptocurrency transaction with a publicly traded company then known as Alt5 Sigma, a deal from which the Trump family is positioned to receive approximately $5 billion in proceeds.
Since the announcement of this deal, the share price of Alt5 Sigma has plummeted by over 90%.
The company, now rebranded as AI Financial Corp., has warned investors that its ability to continue operating is in doubt.
Ethics watchdogs and former regulators have stated that the U.S. Securities and Exchange Commission (SEC) should investigate the company's disclosure practices and the potential conflicts of interest arising from its connection to the President's family.
There is currently no evidence that parties involved in Alt5 Sigma's stock offering last August used the Trump family connection for personal gain.
The White House has stated that the President and his family have no conflict of interest regarding this transaction.
In August of last year, Eric Trump and Donald Trump Jr. appeared at the Nasdaq exchange in New York to celebrate a new business partnership with the little-known public company Alt5 Sigma, aimed at making it easier for average investors to access cryptocurrency backed by the Trump family.
However, less than ten months later, the company warned investors it may not survive. Its share price has crashed over 90%, and a rebranding failed to restore investor confidence. The now-renamed AI Financial Corp. faces delisting from Nasdaq if it cannot lift its share price out of penny stock territory within the next 15 trading days.
A key beneficiary of the Alt5 Sigma deal appears to be the Trump family. Under the August agreement, Alt5 spent $15 billion to acquire crypto tokens from World Liberty Financial, a crypto enterprise co-founded in 2024 by Eric Trump, Donald Trump Jr., and others. Filings from World Liberty Financial indicate the President and several undisclosed family members stand to gain roughly $5 billion from the token sale.
FactSet data shows Alt5's stock closed at $8.97 on the last trading day before the deal announcement (August 8). Now trading under the ticker AIFC, it closed at just $0.66 on June 8, a staggering 93% decline.
In April, lawyers for the non-partisan group Democracy Defenders Fund wrote to the SEC urging the regulator to "immediately initiate an independent investigation of ALTS." The group, frequently critical of the Trump administration on ethics, has not received a response. Its chief anti-corruption counsel, Virginia Canter, stated in an interview, "The key question now is, where did that massive amount of money go?"
The SEC declined to comment on whether it is investigating AI Financial Corp..
For investors who believed a Trump-linked venture was a sure bet during his presidency, AI Financial Corp. serves as a painful lesson. Since the Trump brothers' Nasdaq appearance, the company has churned through three CEOs and three external auditors. In January, it took a loan from World Liberty Financial and used some funds for a stock buyback that failed to support the price. What was marketed as an easy entry point for investors into the Trump family's crypto empire has instead left them with massive losses.
Key Details of the Transaction
Hedge funds including Point72, ExodusPoint, and Soul Ventures invested $7.5 billion to subscribe to new Alt5 Sigma shares.
Alt5 Sigma used $7.5 billion to purchase crypto tokens from World Liberty Financial.
World Liberty Financial, backed by the Trump family, distributed approximately 75% of the proceeds (around $5 billion) to Trump family members.
The Trump brothers then rang the Nasdaq opening bell to publicly celebrate the partnership.
Alt5's SEC filings noted that Eric Trump was nominated for its board, but World Liberty Financial withdrew the nomination after discussions with Nasdaq, which requires a majority of independent directors. The crypto deal precluded Eric Trump from meeting independence standards. Another board seat was intended for World Liberty co-founder Zach Witkoff, son of former Trump Middle East negotiator Steven Witkoff.
In May, when questioned on an MS NOW program about his role and potential conflicts, Eric Trump threatened to sue the host for defamation. MS NOW, like CNBC, is owned by Visant Media Group.
A Trump Organization spokesperson stated via email: "Eric and Donald Jr. have had no involvement with Alt5, are unaware of its operations, never served on its board, were unfamiliar with its management, and never influenced its business."
Some savvy investors sold quickly to limit losses. Major participants in the August deal included two large U.S. hedge funds: Point72 Asset Management, founded by New York Mets owner Steven Cohen, invested $365 million and fully divested by year-end. ExodusPoint Capital invested $440 million and still held a position as of March 31, showing a $140 million paper loss, though earlier sales may have mitigated it. Spokespeople for both funds declined to comment.
Hong Kong-based Soul Ventures Holdings invested $85 million in August and announced a full exit by mid-October. If sold on the open market then, it would have incurred a loss between $560 million and $580 million. The firm did not respond to requests for comment.
An AI Financial Corp. spokesperson responded via email: "We have no intention of engaging with reporting based on false allegations and speculation. Management is focused on running the business, serving customers, and creating long-term shareholder value."
The White House declined to address questions about the Trump family's stake in the struggling AI Financial Corp. affecting the family's wealth. A White House spokesperson stated: "President Trump's assets are held in a trust managed by his children. There is no conflict of interest."
There remains no evidence that any party involved in Alt5 Sigma's August stock offering exploited the Trump family connection for personal profit.
Company Background and Deal Structure
Before linking with the Trump business, Alt5 Sigma underwent several transformations, from recycling to biotech, before pivoting to crypto exchange and payment services in 2024, which led to its major purchase of World Liberty Financial tokens.
World Liberty Financial, founded privately in 2024, lists founders including the President's sons Eric, Donald Jr., and Barron Trump; the sons of Trump negotiator Steve Witkoff, Zach and Alex Witkoff; and business partners Zach Folkman and Chase Hero. A filing on its website in early June shows approximately 38% of its parent company is held by "Donald J. Trump and family-related entities."
World Liberty issues two crypto assets: the governance token WLFI, whose price fluctuates, and the dollar-pegged stablecoin USD1, backed by low-risk assets like U.S. Treasuries.
The August deal followed a common industry model where a public company's stock becomes a vehicle for crypto exposure, known as a digital asset treasury company, akin to Michael Saylor's Bitcoin-holding Strategy firm. The model aims to attract investors who prefer stocks over direct crypto ownership.
In this case, Alt5 became the investment vehicle for World Liberty's WLFI token. Investors buying Alt5 stock were effectively betting on the price of the Trump-linked private company's cryptocurrency.
The deal, announced August 11, had two parts: Alt5 issued stock and warrants to World Liberty for $7.5 billion worth of WLFI tokens; concurrently, Alt5 sold $7.5 billion in new shares to outside investors at $7.50 per share. The proceeds, minus fees, went to World Liberty for more WLFI tokens. Alt5 received nearly 7.3 billion WLFI tokens initially valued at $15 billion. World Liberty CEO Zach Witkoff became Alt5's board chairman.
World Liberty's 2024 token documents and website fine print stated the Trump family would receive 75% of token sale proceeds. After fees and expenses, the August deal netted the Trump family roughly $5 billion.
The family also holds a minority stake in World Liberty, giving it indirect exposure to Alt5's assets. SEC filings show World Liberty received 1 million Alt5 common shares, 99 million pre-funded warrants, and 20 million warrants with exercise prices between $7.50 and $9.75.
Mounting Troubles and Regulatory Scrutiny
Even before its April rebranding, Alt5 disclosed numerous risks to investors.
Former New Jersey Attorney General Matthew Platkin, now in private practice and working with Canter's group, stated: "Alt5 Sigma checks every box that typically triggers high regulatory scrutiny and would normally prompt an investigation."
He added, "There are multiple red flags here that warrant a full investigation."
Post-deal filings disclosed that in May 2025, a Rwandan court convicted an employee of Alt5's Canadian subsidiary on money laundering charges; the company is appealing. In October, the CEO was suspended; a temporary replacement was replaced the next month by a third CEO. Alt5 only noted these changes in SEC filings without detail.
In November, Alt5 notified investors it received a delisting warning from Nasdaq for failing to file a quarterly report; its external auditor resigned the same month. After hiring a new auditor, it discovered in December that the second auditor's license had lapsed, forcing a third change. The company eventually filed the report, temporarily averting delisting.
Canter argued issues like the Rwanda case and auditor troubles should have been disclosed sooner. "When I was at the SEC in enforcement, one or two of these disclosure failures would have triggered an investigation," she said.
Enforcement agencies typically don't comment on potential investigations. In 2024, the company, then named JanOne in its biotech phase, settled an earlier fraud allegation with the SEC for $250,000 without admitting guilt.
Canter suggested a potential obstacle: a prior "anti-weaponization" settlement between the Trump family and the IRS. She said the agreement's vague language could be interpreted to restrain regulators from investigating Trump-linked entities like AI Financial Corp..
The SEC declined to comment on whether the IRS settlement affects its investigative authority. The Justice Department and IRS did not respond to requests for comment.
Precarious Financial State
Whether AI Financial Corp. can continue is uncertain. On May 18, it warned investors that the plummeting WLFI token price caused a $348 million hit to its balance sheet in Q1; it reported an operating loss, with total liabilities exceeding assets.
The company wrote in its SEC filing: "These conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year."
Rescue efforts have faltered. In late January, it announced a $15 million loan from World Liberty Financial, using part to buy back its own stock, with little effect.
The low stock price is an existential threat. Nasdaq rules require a share price above $1. AI Financial Corp. closed below $1 for the 15th consecutive day on June 8; in mid-May, it had traded below $1 for 24 straight days before a brief rebound.
The company could attempt a reverse stock split to boost the share price technically, but this doesn't address core investor sentiment.
Since the Trump brothers rang the Nasdaq bell, the core asset—the massive WLFI token holding—has drastically depreciated. The 7.3 billion tokens acquired for a net cost of $0.20 each were worth only $0.057 on June 8, a 72% drop, giving them a current market value of $4.12 billion. FactSet shows AI Financial Corp.'s total market capitalization is just $90 million, indicating the market views the stock as riskier than the underlying crypto.
World Liberty Financial is also embroiled in litigation with crypto investor Justin Sun, an early large buyer of WLFI who alleges the company restricted his ability to sell tokens; lawsuits are in early stages.
AI Financial Corp. cannot easily sell its crypto assets to raise cash; the August agreement with World Liberty includes a lock-up period preventing immediate sales.
Delisting is not immediate, and the company could take steps to avoid it. However, the mere risk undermines the deal's original logic. Investors seeking Trump-linked crypto exposure can now buy the tokens directly, bypassing a volatile stock whose price has fallen below the value of the crypto assets it holds. With the share price languishing below $1, AI Financial Corp. and its remaining investors desperately need a turnaround.
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