World Liberty Financial, the crypto project tied to President Donald Trump and his family, used roughly $440 million worth of its own WLFI governance tokens as collateral to borrow money through the decentralized lending platform Dolomite. The loan came in at $75 million — $65 million in the project's own USD1 stablecoin and another $10 million in USDC.
Regular investors holding WLFI tokens were locked from selling while the transaction went through. Shortly after, the token's price dropped nearly 10% to a record low.
How the loan worked
The company posted about $440 million in WLFI tokens as collateral on Dolomite, a DeFi lending protocol. In return, it received roughly $75 million in stablecoins. The mechanics aren't unusual in decentralized finance — but the timing and the lock on regular holders raised eyebrows. Investors couldn't sell their WLFI during the loan execution. By the time they could, the token had already slid to an all-time low.
Warren sets a May 26 deadline for the SEC
Senator Elizabeth Warren sent a letter to SEC Chair Paul Atkins on May 14, asking the agency to investigate whether World Liberty Financial misled investors or broke securities laws tied to the WLFI token. She set a response deadline of May 26. The letter didn't accuse the project outright, but the questions are pointed: Did the company disclose the lockup? Did it properly register the token? The SEC hasn't commented publicly.
The Trump family's stake
Trump-affiliated entities stand to collect 75% of all WLFI token sale proceeds after expenses. The company raised close to $715 million through token sales, and the Trump family's total crypto-linked wealth connected to the project reportedly crossed $1 billion. The family currently holds roughly 22.5 billion WLFI tokens through an entity called DT Marks DEFI LLC. That means they have a lot riding on the token's value — and a lot of control over its liquidity.
Regulatory backdrop: CLARITY Act and party-line votes
The broader debate over crypto regulation continues under the proposed CLARITY Act, one of the largest crypto-focused bills in US history. During a recent markup session, Warren introduced amendments targeting the Trump family's involvement in crypto markets. They were voted down along party lines. That vote previews the fight ahead: Democrats pushing for more scrutiny, Republicans wary of overreach.
Warren's SEC letter deadline arrives May 26. Whether the agency acts before then — or at all — is the open question. The WLFI token's price hasn't recovered.
