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- [00:00]
A
It's very clear, well beyond the crypto side of things, that Donald Trump, he likes calling himself a deal maker, he wrote out of the deal. He's very transactional. And you see that in everything. So I say I'm not a political reporter, but I certainly consume that news. And that's always been the case, and that's certainly the case in the second administration. And I think the cryptocurrency industry, at least in my view, as somebody who watches it very closely, is the most plain, I, I guess example of that transactional nature of this president.
- [00:37]
B
There have been a few instances on this show where guests have questioned if President Trump's involvement in crypto projects is a conflict of interest. So I thought that it would be good to bring on CoinDesk Deputy Managing Editor of Tech and Protocols, Sam Kessler, who's been following the launch of The President's meme coins, NFTs and DeFi project, and also tracking the relationships that come along with these to give a little bit more context. Sam Kessler, welcome to Markets Daily.
- [01:04]
A
Thanks, Jen. Good, good to join you.
- [01:06]
B
I'm happy to have you here because there has been a lot of talk lately, even right here on this show, about the potential conflicts of interest for this president, President Donald Trump, and the folks around him, the folks who are working in his administration, when it comes to their crypto involvement. And so I'm really looking forward to digging into this deeper with you at a very high level. Talk to me about your reporting. What have you found when it comes to this president and crypto that differentiates him from all other sitting presidents in the United States?
- [01:40]
A
Yeah, I mean, I guess let's look at two sides of it. First, it's just on the political side and what the president is doing and has said he's going to do or was going to do. And then, then we'll look at the president personally and he's a businessman. We'll look at his investments. So on the political end, Donald Trump was not courting the cryptocurrency industry during his first term or first campaign. There's all these things that you can see online about just disparaging comments that he's made about bitcoin in particular, but he's had a total about base on that and has since, as we all, I'm sure watching the show, know by now, really embrace crypto. He had his White House crypto summit just last week. He has a crypto czar in David Sachs, a prominent Silicon Valley investor. So he has really embraced crypto and he's pushing through policies and pulling back regulatory red tape in a way that we just, you know, not only did we not see that not happening in previous administrations and his own included, but we just didn't see it talked about the way that we do now. And then the other side of it is just because he's so active as a president in, I guess, regulating or not regulating and just enacting policies like this reserve that we'll talk about on cryptocurrency. He also is an active player in the market. So just two days before his inauguration, his second inauguration, he launched a meme coin called Trump. He, over the course of his campaign, did a couple other things. He had an NFT collection. He also has something called World Liberty Financial, which is a decentralized finance platform, which has been the bulk of my focus. There's a lot of potential conflicts when it comes to, to that, given that we have both of these sides.
- [03:14]
B
And now let's just level the playing field here for the audience. Can presidents hold equities and that sort.
- [03:19]
A
Of thing, according to Donald Trump? I guess they can. I mean, I'm not a regulatory reporter, I'm not a political reporter. I report on crypto. But I think the pretty incredible thing here is just that you can see the president's investments on chain or he's invested in companies that invest into things. And he also has other holdings outside of cryptocurrency, of course. And it's been a theme since his first term when he didn't release his tax returns, he said to hell with the norms. And one norm, whether or not it was a rule, was that one could not or was not actively invested in industry. And that is whether or not it's allowed. It's simply not the case with this president. You can just see it and he doesn't try to hide it.
- [04:03]
B
Yeah. All right. We've talked about the NFT projects, the meme coins, of course, that were launched just a few days before inauguration. But his defi project, World Liberty Financial, has been interesting play here. Let's just start by talking about his role in this project.
- [04:21]
A
Yeah. So Donald Trump and his sons, all three of them have been rallying behind. They'd been teasing that they were creating a cryptocurrency platform. At first it was going to be called the Defiant Ones, but then they announced it. I think it was in October over. But correct me if I'm wrong, we actually scooped it here at coindesk before it came out. But so I should know the date. But anyway, they launched this platform and the idea, at least on the website, is that it is Donald Trump is the, quote, unquote, chief crypto advocate. But it's not just that. Even though he claims not to have any sort of official role with the company and no management position or operational role, it is also the case that you can see in the fine print, literally on the bottom of their website and in the documents that they've released, that he is entitled to 70% of sales, 70% of gross revenues of the platform. And that's complicated because it depends on how, how you complicate how you calculate revenues. But that's something, maybe we don't want to get into it, but he, he's entitled to, to a share of this project.
- [05:22]
B
Okay, that's interesting now I guess let's just start here. What does World Liberty Financial do?
- [05:27]
A
World Liberty Financial, when it first came out, said that it was going to build a lending platform based on aave, which is a popular decentralized finance app. But it has since said a lot of things about everything else it's going to do, helping to support US Dollar dominance. It's all in alignment with Donald Trump's America first thing, but it also hasn't launched a product yet. So it launched a token called WLFI wilfi. And that token is in theory going to give stakeholders a say in the direction of the platform. But importantly, not only has this platform not actually launched yet, but the token hasn't really fully launched either. You can buy the token. That is if there's a product to this thing, that is the product. You can buy this token, you can hold the token. But first you can only buy or hold it if you are either non US investor or an accredited US investor. And you can't transfer the token no matter who you are. At least that's the idea. You can't on chain, there are just like programmatic restrictions in place that prevent one from buying, selling, trading outside of just buying it directly.
- [06:36]
B
There's no product yet associated with World Liberty Financial. There is a token. But World Liberty Financial, what's interesting, interesting to me, has been acquiring this treasury of assets across the board and I know you've dug into some of those assets. We spoke a little bit about Justin Sun's involvement in the project as an advisor and also an investor at Consensys at the desk. But walk me through the assets that are in that treasury that World Liberty Financial is, is busy creating.
- [07:10]
A
Yeah, so you mentioned a couple things there. It has accrued it being World Liberty Financial has accrued, I believe it's about $500 million now in sales of the World Liberty Financial token. Most of those sales are just like they're in like stablecoins, like US$, USDC, USDT things that are backed by dollars. And most of the sales have been moved off chain. We don't know what they're doing. They're in custody at Coinbase. But a lot of the sales are still in a treasury and the project has said itself that it's going to build out a strategic reserve not unlike the President's US Reserve that he announced a couple weeks ago. But anyway, they hold a lot of tokens. One of the most prominent tokens, the biggest token I think that they hold, if I'm not mistaken, is Ether, the native token of the Ethereum blockchain. But they also hold other tokens. They hold wbtc, which is a wrapped token that represents bitcoins. And there's a lot of links between WBTC and Justin sun and that gets in Justin sun, who you mentioned, who was is the biggest investor in the project. And that gets into the conflict side of things things which is that they also hold tokens like trx, which is Justin Sun's Tron blockchain's native token. They also hold tokens like Move Ondo Chainlink. These are tokens that are relatively small relative to some of these other ones that we've mentioned. But there's been reporting from some of our peers in the industry media landscape like Blockworks that said that there's a sort of pay for play thing going on here. We have not confirmed this independently at CoinDesk, but according to Blockworks, there's these deals that have been going on behind the scenes where people will essentially pay a fee to World Liberty Financial in exchange for World Liberty Financial purchasing your tokens. And the way that looks on the back end is a project like movement which has a token that most people outside of like the Inside Circle Baseball World of Cryptocurrency haven't heard of. They have a token move. That token gets purchased by Donald Trump vis a vis World Liberty Financial and then move emails reporters like us and says hey look, Donald Trump has endorsed our crypto and what do you know, the price goes up and there's a huge potential for conflict here, right where they have the brand of the president and it looks like when they buy a token it is going to. It is an endorsement by a sitting president who is making a lot of moves in crypto. There's so much to say on this, so I'll stop there. But that's the the very lengthy summary.
- [09:35]
B
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- [10:38]
A
Yeah, I mean let's start with World Liberty Financial. World Liberty Financial is founded by Zach Witkoff, whose father is a close ally of Trump's. And then Zach Falkman, another Zach who it was lesser known in crypto circles. There's a lot that you can read about him in Coindesk and elsewhere about his past. He's done a lot of things in business, different kinds of business. And then Chase Hero who's of that same ilk, they had been onlyfans competitor together that Jake Paul was a part of. They're from like a more of the influencer realm. But anyway they're the people behind this project and they have a seat at the table and they very visibly have a seat at the table. When Trump has something like his cryptocurrency summit, you see not only like tweets in the lead up to it from folks like both of his acts, I guess like boasting their closeness to the President. But they'll also post pictures of themselves at the White House. So the idea is they are very close to this. But on top of that you have folks like Eric Trump attending conferences, for example, Ondo, which is another token that was purchased by the World Liberty Financial treasury. They had a conference a while back a couple months ago. And then Eric Trump spoke at their conference. And World Liberty Financial, a project in which Eric Trump ostensibly has a stake and the President ostensibly has a stake their currency went up in price after they. They bought this thing. And then Eric is speaking at their conference. So hopefully this ramble makes some sense. But you see how there are people on the inside of Trump's administration, family, but also of this project, who are using their position of closeness to the President to show crypto founders and crypto startups, hey, a spot in this portfolio is pretty lucrative. And how they secure that spot, I don't know. That's what Blockworks reporting has seen, and we've done some reporting on our end. I don't mean to be coy about it, but there's a lot of reason to believe that this is true. There's an obvious potential for conflict at the very least.
- [12:28]
B
Yeah, there are some analysts who've come on the show, like I mentioned at the beginning, and most recently former CFTC chair Tim Massad, who said it is a brazen form of corruption and that the President is. I don't know if it's a direct quote, but basically he said, paying back the people who supported him on his campaign trail. Many of those people being folks who lead crypto companies, now make sense of this for me. So we have World Liberty Financial, who is doing business with many of the projects and leaders you just mentioned, then we have the strategic Bitcoin reserve, and we have the potential for this crypto stockpile in the United States, although we haven't really seen any action taken yet to create this crypto stockpile. What are you seeing, if any parallels between that crypto stockpile and the assets mentioned there and some of the investments we just spoke about?
- [13:22]
A
Yeah, I mean, this brings me to David Sacks, who I mentioned before. Maybe by way of a story, I can explain how I'm at least looking at this. So when this crypto stockpile came out and Donald Trump announced that he was going to be adding currencies to it, he didn't name Bitcoin and Ethereum. He named smaller currencies Cardano, XRP and Solana, which are well known in the crypto realm, but not that, you know, well known outside of it. Bitcoin and Ethereum even are. And that raised questions. And a lot of people immediately looked at Trump's crypto czar, his closest crypto advisor, David Sachs, and they were like, hey, David Sachs is invested in, either directly in Solana or in companies that invest in all of the cryptocurrency assets that Donald Trump said he was going to be adding to this stockpile. So the insinuation was that, was that David Sachs was going to directly benefit off of his policy council by saying, hey, we should do the stockpile and his assets are going to go up. Now, David Sachs came out and we reported on this, too. He made it very clear, and people in his circle, I think there's a lot of good reason to believe it. He made it very clear that he had divested from all of his crypto holdings. He had gotten rid of his Solana. He had gotten rid of. So he's founded a venture firm. And that venture firm invested in companies like Bitwise, which runs an ETF that was holding a lot of these currencies that Trump was going to put in the stockpile. He and his firm divested from their crypto holdings. He actually went pretty far to not only avoid any conflict, but to avoid the appearance of conflict. And it came out a little bit late for him. The controversy happened. But anyway, he did that. But meanwhile, while you set also all these people writing things, ourselves included, about how David Sacks might have been conflicted, you can see on the blockchain that World Liberty Financial, for example, holds a ton of cryptocurrencies, including some of the cryptocurrencies that Donald Trump named to his stockpile, like Bitcoin and Ethereum. So it's just this weird irony. And I honestly, as like a US Citizen and a reporter, don't know how I'm supposed to. How to think about this, frankly, is again, all of the articles where we're focused on David Sachs, who did it seems, try to disentangle himself, whereas Donald Trump, I guess it's just so normalized. His investments are there out in the open and pretty obvious where if the stockpile adds assets and those assets go up in price, Donald Trump's own crypto portfolio directly goes up in price. It's. Yeah, I guess that's my thinking around it.
- [15:44]
B
I guess to add to that, the meme coins that we mentioned earlier on in the interview, Trump's meme coin. Trump is issued on the Solana blockchain. So there is a connection there as well. All right, let's wrap this up here. What is, what does this mean? As someone who is exploring this further, I know that you're doing a lot of reporting on this. You're talking to folks who are thinking about this and looking into it more. What does this mean for people who are trying to make sense of President Trump's stance on crypto and his involvement in crypto?
- [16:17]
A
I think it's very clear, well beyond the crypto side of things, that Donald Trump, he likes calling himself a deal maker. He wrote out of the deal. He's very transactional. And you see that in everything. So I say I'm not a political reporter, but I certainly consume that news. And that's always been the case, and that's certainly the case in the second administration. And I think the cryptocurrency industry, at least in my view, as somebody who watches it very closely, is the most plain, I guess, example of that transactional nature, this president. Now, there's been a lot of questions about what backroom deals, if any, have happen to get certain tokens into Donald Trump's world Liberty Financial Treasury. I'm certain we're going to see a lot more reporting about that, not only from us, but from some other non crypto outlets as time goes on. But I think that's the way to just view this as not an investor, not like a crypto enthusiast or whatever, but just as a person interested in this president. It's all just laid out for us to see. And the beauty of a transparent ledger is that you can track it all. So I guess, yeah, that's how I'm viewing it.
- [17:22]
B
All right, you can follow us as we follow this story on CoinDesk.com you can find all of Sam's wonderful reporting on CoinDesk.com and if you enjoy listening to Markets Daily, you can find us on YouTube. If you don't subscribe already, please hit that subscribe button. We're also on the Coindesk Podcast network that is available on all podcast platforms. I'm Jen Senasi. We will see you next time.