Last summer, a money-losing digital-payments firm with a history of legal troubles seized what its leaders thought was a big opportunity: a deal with the Trump family’s crypto platform.
ALT5 Sigma Corp., a blockchain firm with fewer than two dozen employees, suddenly pivoted to buying virtual tokens issued by World Liberty Financial. World Liberty — originally founded by President Donald Trump, Middle East envoy Steve Witkoff and their sons — was taking a stake in ALT5 and appointing Zach Witkoff its new chairman. To buy World Liberty tokens, the company raised $750 million from heavyweights including hedge funds Point72 Asset Management and ExodusPoint Capital Management.
The WLFI transaction came together in just weeks, according to people familiar with the matter, who requested anonymity to discuss private conversations. Internally, it seemed like a major coup, especially after an attempt to woo World Liberty with a no-limit credit card partnership had failed earlier in the year, the people said.
Retail investors snatched up the stock, looking to ride the wave of the new powerful connections. The company, which was worth roughly $100 million in the month before the deal, suddenly cracked $1 billion in market value. Donald Trump Jr. and Eric Trump, the president’s two oldest sons, heralded the transaction by ringing the Nasdaq opening bell.
Nearly a year later, the buzz is gone. ALT5 has changed its name, its CEO and cycled through three auditors. The company now known as AI Financial Corp. is worth less than $60 million and faces getting kicked off the Nasdaq stock exchange. The tokens it bought at 20 cents each have slumped to about 6 cents apiece.
The ALT5 deal brought more than half a billion dollars to members of the Trump family — one of the single biggest inflows of crypto income to the family documented yet. Last year, the president earned more than $1.4 billion from cryptocurrency businesses, according to his latest financial disclosures. More than $550 million came from World Liberty alone.
Investors who bought ALT5 shares last August, meanwhile, have lost more than 90%.
https://finance.yahoo.com/markets/crypto/articles/trump-crypto-tie-fueled-family-103000646.html