The pitch from “ZMoney” arrived on the encrypted messaging app Signal just days before Donald J. Trump’s presidential inauguration.
“ZMoney” was Zachary Folkman, an entrepreneur who once ran a company called Date Hotter Girls and was now representing World Liberty Financial, the cryptocurrency firm that Mr. Trump and his sons had recently unveiled. Mr. Folkman was writing to a crypto startup in the Cayman Islands, offering a “partnership” in which the firms would buy each other’s digital coins, a deal that would bolster the startup’s public profile.
But there was a catch, The New York Times found. For the privilege of associating with the Trumps, the startup would have to make, in effect, a secret multimillion dollar payment to World Liberty.
“Everything we do gets a lot of exposure and credibility,” Mr. Folkman wrote, asserting that other business partners had committed between $10 million and $30 million to World Liberty.
The Cayman startup rejected the offer, as did several other firms that received a similar pitch from World Liberty, executives said. They considered the deal unethical, concluding that World Liberty was essentially selling an endorsement — and hiding the arrangement from the public.
World Liberty’s executives, who have maintained that they did nothing improper, were undeterred. They successfully pitched similar deals to other firms while also marketing their coin to buyers around the world, reaping more than $550 million in sales, with a large cut earmarked for the president’s family.
Mr. Trump’s return to the White House has opened lucrative new pathways for him to cash in on his power, whether through his social media company or new overseas real estate deals. But none of the Trump family’s other business endeavors pose conflicts of interest that compare to those that have emerged since the birth of World Liberty.
The firm, largely owned by a Trump family corporate entity, has erased centuries-old presidential norms, eviscerating the boundary between private enterprise and government policy in a manner without precedent in modern American history.
Mr. Trump is now not only a major crypto dealer; he is also the industry’s top policy maker. So far in his second term, Mr. Trump has leveraged his presidential powers in ways that have benefited the industry — and in some cases his own company — even though he had spent years deriding crypto as a haven for drug dealers and scammers.
He has filled his administration with sympathizers to the crypto cause, including by appointing a former adviser to industry players as chairman of the Securities and Exchange Commission. In addition, the Justice Department recently disbanded a crypto crimes task force, continuing a broader unwinding of Biden-era scrutiny of the industry.
A Times examination of World Liberty’s rapid ascent from fledgling startup to international force — and Mr. Trump’s conversion from crypto skeptic to industry cheerleader — highlights the range of conflicts of interest trailing the company:
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World Liberty has directly benefited from Mr. Trump’s official actions, such as his announcement of a federal crypto stockpile that would include a digital currency the firm has invested in. The president’s announcement caused a temporary jump in the value of World Liberty’s holdings.
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World Liberty has sold its cryptocurrency to investors abroad, including in Israel and Hong Kong, according to interviews and data obtained by The Times, establishing a new avenue for foreign businesses to try to curry favor with Mr. Trump.
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Several investors in World Liberty’s coin managed firms that the federal government accused of wrongdoing. They include an executive whose fraud case was suspended after he invested millions of dollars in World Liberty. Other investors and business partners, some of whom haven’t been publicly identified before, are looking to expand in ways that will require the Trump administration’s approval.
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World Liberty proposed swapping cryptocurrencies with at least five start-ups, and often used the Trump name to solicit steep payments as part of the deals. Even in an industry with a disreputable history, the deals raised alarm among veteran executives.
“It’s a black spot on our industry,” said Andre Cronje, a founder of SonicLabs, a crypto firm that turned down World Liberty’s pitch. Anyone who accepted would “obviously think they’re going to make money because it’s the officially endorsed Trump project.”
A spokesman for World Liberty, David Wachsman, disputed that any of the company’s deals constituted a “one-sided payment for services rendered.” But he acknowledged that the company has engaged in “mutual investment deals,” and said that its deal-making had resulted in “thoughtful, strategic exchanges between parties who stand to mutually benefit.”
Mr. Wachsman also said it would be “false, absurd and dangerous to suggest that investments or partnerships with World Liberty Financial were conducted as some sort of political quid pro quo.”
“Never has an investor or partner requested any political favoritism,” he said. “Nor would we ever entertain such a possibility.”
Still, the company’s deal-making benefits the president’s family. A Trump business entity owns 60 percent of World Liberty, according to the company’s website, and is entitled to 75 percent of certain revenue from coin sales, which could be converted into cash.
“It’s one of the more successful things we’ve ever done,” Eric Trump, the president’s son who runs the family business, said in an interview this month at the Trump Doral golf course in Florida.
He and his older brother, Donald Trump Jr., are actively involved in World Liberty, though they rely on three partners to oversee the daily operations. Two of them, Mr. Folkman and Chase Herro, have a mixed track record in crypto. The other is Zach Witkoff, the son of Mr. Trump’s envoy to the Middle East, Steve Witkoff, who is also a World Liberty founder.
In recent days, Zach Witkoff, Mr. Folkman and Mr. Herro were in Pakistan meeting with the country’s prime minister, Muhammad Shehbaz Sharif, and other top government officials to discuss World Liberty. The trip, complete with limousines, a dance performance and police escorts, seamlessly blended the president’s business interests with the trappings of a state visit. (Mr. Wachsman said no U.S. government officials were involved in the meetings.)
President Trump has noted that conflict of interest laws do not apply to him, and that he has broad immunity for official actions he takes as president.
In a statement, a spokeswoman for President Trump noted that his “assets are in a trust managed by his children,” and that as a result, “there are no conflicts of interest.” (The trust still benefits President Trump directly.)
World Liberty’s supporters are unbothered by questions about conflicts.
“Trump wants to make a lot of money in crypto,” Konstantin Kuznetsov, a Russian citizen living in Miami whose Gibraltar-based firm bought $1 million of World Liberty’s coins, said in an interview. “We can join in this wave.”
Chief Crypto Advocate
As a businessman who made his name in the tactile world of real estate, Donald Trump never aspired to build a digital coin empire.
Indeed, at the end of his first term, Mr. Trump turned to social media to express disdain for cryptocurrencies.
They “are not money,” he warned. Their “value is highly volatile and based on thin air.”
By last year, his views had begun to shift.
His older sons had become enthusiastic crypto proponents after the Jan. 6, 2021, attack on the Capitol effectively exiled the family business from the mainstream financial system.
“We built and sold and held real estate forever. And for a long period of time, I had access to everyone in the world,” Donald Trump Jr. explained in a live video appearance at a crypto conference in Washington last month. “All of a sudden that became really difficult. And I sort of realized very quickly just how much discrimination there is in the ordinary financial markets.”
The change of heart also coincided with an influx of millions of dollars in campaign contributions from the crypto industry into the Trump re-election effort. Under the Biden administration, the industry had faced nearly 100 enforcement actions by the S.E.C., and crypto executives wanted a leader to champion their interests in Washington.
During his campaign stumps, Mr. Trump’s qualms about crypto appeared to vanish. At a Bitcoin conference in July, he vowed to turn the United States into the “crypto capital of the planet.”
Bitcoin
Bitcoin is the original cryptocurrency and still the most valuable by far. At current prices, one Bitcoin is worth about $94,000.
Two months later, Mr. Trump completed his conversion, announcing that he and his sons would enter the crypto marketplace with a new venture called World Liberty Financial.
Mr. Trump delivered the news in a livestream at his Mar-a-Lago estate in Florida, where he had gathered with Eric and Donald Jr., along with Mr. Herro and Mr. Folkman.
“Crypto is one of those things we have to do,” Mr. Trump said. “Whether we like it or not, I have to do it.”
Mr. Herro and Mr. Folkman were unusual choices to partner with a president.
Mr. Folkman, who has short curly hair and tattoos, ran a company in his 20s tutoring forlorn men on how to pick up women. In numerous podcast appearances, Mr. Herro has recounted his life’s redemption arc, describing a wild youth in which he was charged with marijuana possession and spent a couple of weeks in a Wisconsin jail.
The two men had worked together for years, selling everything from colon cleanses to get-rich-quick advice, before pivoting to crypto with uneven results.
In 2022, Mr. Herro urged a roomful of crypto enthusiasts to invest in the currency TerraUSD, calling it “one of the coolest assets in history.” The coin imploded a month later, erasing billions of dollars in wealth. Mr. Herro’s most recent venture with Mr. Folkman was a crypto platform called Dough Finance, which was hacked in July, leading to the theft of $2 million.
It’s not clear exactly how the pair earned the Trumps’ trust. But Steve Witkoff said last year that he met them through his son, and then introduced them to the family.
On the livestream introducing World Liberty, Donald Trump Jr. hailed the men as first-class financial minds.
“You could put them in a boardroom at Goldman Sachs, and they’re going to smoke the people in the room,” he said.
In October, Mr. Herro and Mr. Folkman got to work on the company’s first initiative — selling a new cryptocurrency, which it called $WLFI, with the goal of $300 million in sales.
These coins would be different from $TRUMP — the so-called memecoin that spiked in January after Mr. Trump marketed it to his followers before it abruptly crashed.
Memecoin
A memecoin is a type of cryptocurrency based on an online joke or celebrity mascot. It has no practical function other than speculation. After $TRUMP’s initial surge, its price plummeted, costing investors a cumulative $2 billion.
World Liberty, at least according to its marketing pitch, eventually plans to operate as a new type of internet bank that would allow customers to borrow and lend money in various digital currencies. Anyone who bought the $WLFI coins would get to vote on certain bank business decisions like shareholders in a traditional company.
Mr. Trump was at the core of the pitch. The company published a 13-page “Gold Paper” that described its mission and leadership team. On the cover was a portrait of Mr. Trump, styled to look as if gold paint had been splashed across the page.
He would serve as the company’s “Chief Crypto Advocate,” the paper said.
When World Liberty launched, the Trump family and its affiliates were given 22.5 billion units of the crypto coins — a stash now worth at least $1.1 billion on paper, depending on the various prices used in recent sales.
Under the company’s rules, the Trumps and other World Liberty investors are not allowed to sell their coins on the open market, though the company has said it might eventually lift that restriction if other buyers of the coin agree.
Initially, there were few buyers. By the end of October, World Liberty had sold only $2.7 million worth of the coins, a tiny fraction of its goal.
Election Day was a game changer.
A Flood of Investors
With polls closed in most of America and Mr. Trump on his way to victory, the World Liberty account on X posted a celebratory message on Nov. 5: “Big things on the horizon.”
Soon a surge of investment flowed into World Liberty’s cryptocurrency.
Most crypto purchases are recorded on a public ledger called the blockchain, with the buyers and sellers largely anonymized. But World Liberty has said it performs extensive checks on investors in its coin, so it knows who they are.
Blockchain
The blockchain is the publicly viewable ledger of all cryptocurrency transactions. Every time someone spends money with a digital coin, it shows up as an entry, allowing investigators to track the flow of funds. In most cases, the identities of the buyers and sellers are concealed behind strings of letters and numbers.
An analysis performed for The Times by the forensics firm Nansen, drawing on crypto industry data, showed that many of the investors were based abroad in places like Singapore, South Korea, Hong Kong and the United Arab Emirates.
Federal law prevents foreigners from donating to presidential campaigns or inaugural funds, but World Liberty’s coin sale offered a new, legal way to back Mr. Trump.
“The main reason for purchasing such a token was to support Trump’s inauguration, as he was the first crypto-friendly president of the United States,” said Keer Lau, chief strategy officer at Orbiter Finance, a Hong Kong-based entity.
Some investors, domestic and overseas, have managed firms that ran afoul of U.S. regulations. One was Yoni Assia, an Israeli who founded eToro, an online trading platform whose U.S. subsidiary reached a $1.5 million settlement with the S.E.C. last year for crypto-related violations. Troy Murray, a Puerto Rico-based investor, also bought World Liberty’s coin. Before that, he had helped create BarnBridge, which in late 2023 agreed to pay the S.E.C. $1.7 million to settle its own crypto-related accusations.
Since Mr. Trump took office, some World Liberty investors have pushed the government for regulatory approvals, or are poised to interact with the administration as they try to build or expand businesses in the United States.
In March, Mr. Assia’s company notified the S.E.C. that it intended to go public in the United States. DWF Labs, a crypto firm based in the United Arab Emirates, announced this month that it had bought $25 million of $WLFI — and that it was opening a New York office.
“Our visibility in the U.S. has been increased because of this deal,” Andrei Grachev, the managing partner of DWF Labs, said in an interview. “We would like to have direct dialogue with the policymakers.”
The crypto executive with perhaps the most to gain from his affiliation with World Liberty is Justin Sun, a Chinese billionaire who founded the crypto platform Tron.
Mr. Sun gained global attention late last year, when he spent $6.2 million at an art auction to buy a banana that had been duct taped to a wall. Not long after, Mr. Sun made another headline-grabbing maneuver: He spent $75 million on $WLFI coins.
The investment drew widespread criticism given that Mr. Sun had a clear incentive to gain favor with the Trump White House. During the Biden administration, the S.E.C. sued Mr. Sun, arguing that he had fraudulently inflated the price of a Tron cryptocurrency.
Mr. Sun has denied the S.E.C.’s charges, and in a text message to The Times last year, he said his World Liberty investment was simply a vote of confidence in the Trump family’s “excellent project.”
In late February, the S.E.C. asked a federal judge to halt proceedings in Mr. Sun’s case: The agency said it was exploring “a potential resolution.” The judge granted the stay.
The Stars Align
Justin Sun gave World Liberty a big lift. But Mr. Trump’s company wanted more money. Much more.
So World Liberty executives soon announced what they called “a transformative initiative” to partner with other crypto outfits and invest in their coins. The strategy, the executives said in February, would leverage World Liberty’s growing clout to help their lesser-known partners.
“It’s like taking care of your brother in the space,” Mr. Herro said at a crypto event in New York that month.
But World Liberty’s public pronouncements omitted a key aspect of its private pitch to several crypto startups, executives at these companies told The Times. World Liberty wanted to sell its own coin — not just to invest in others’. It was proposing a currency swap.
Here is the deal World Liberty offered, according to executives at three crypto firms approached by the company: The startups would spend between $10 million and $30 million on a large chunk of World Liberty’s coins. In return, World Liberty would buy a smaller amount of each startup’s own cryptocurrency. World Liberty would keep the rest of the money for itself — a premium as high as 20 percent.
World Liberty’s purchases would signal to the market that Mr. Trump’s firm had deemed the startups worthy of investment. But the market would have no way of knowing that World Liberty had been compensated for that endorsement. Some details of a similar pitch from World Liberty were previously reported by Blockworks, an industry news outlet.
“They kept telling us, ‘We’re like, we’re super close to Trump,’” said Mike Silagadze, the chief executive of Ether.Fi, a crypto startup that World Liberty approached.
“We immediately rejected,” said Dominik Schiener, who founded the IOTA Foundation, a Berlin-based group that also received the pitch. “It’s a very dishonest approach.”
In his statement, Mr. Wachsman, the World Liberty spokesman, said The Times’s reporting contained “fundamental misunderstandings about standard industry practices” and called the company’s business arrangements “not only common in the blockchain industry but essential for creating lasting economic alignments in business, generally.”
“These arrangements establish skin in the game for all parties,” he added.
The benefits of a partnership were enough to attract at least five crypto firms to strike other deals with World Liberty, without disclosing details of the financial arrangements, The Times found.
In one deal, the Sui Foundation, a U.S.-based group, announced that World Liberty would buy an unspecified amount of its cryptocurrency, prompting Sui’s price to jump more than 10 percent. As part of the arrangement, the foundation was slated to receive World Liberty’s coins in return, said two people familiar with the deal who requested anonymity to discuss private negotiations.
Other World Liberty partnerships have shown how Mr. Trump is mixing his official role with his business. In December, the company announced that it would use technology designed by a startup based in Lisbon, Ethena Labs. It also bought more than $5 million of Ethena’s cryptocurrency.
One of Ethena’s investors is Arthur Hayes, a crypto entrepreneur who pleaded guilty to violating the Bank Secrecy Act in 2022 and was sentenced to six months of home detention. Last month, Mr. Trump granted Mr. Hayes a pardon. (A spokesman who represents both Ethena and Mr. Hayes declined to comment.)
Another World Liberty partner is Ondo Finance, a New York-based startup backed by Founders Fund, the conservative billionaire Peter Thiel’s venture capital firm.
World Liberty made its first purchase of Ondo’s coins in December, buying more than 130,000 of them. The transaction at least briefly helped drive up the price of Ondo’s coin, drawing headlines in crypto news sites celebrating World Liberty’s bet.
In January, Ondo donated $1 million to Mr. Trump’s inauguration, securing an invite to a candlelight dinner at the National Building Museum in Washington, where the guest list included several of Mr. Trump’s cabinet nominees. Ondo also helped sponsor an inauguration event called the Crypto Ball. Soon after, Donald Trump Jr. and World Liberty’s management team were headliners at a conference Ondo organized in New York.
“This is a moment we weren’t sure was gonna happen,” Ian De Bode, Ondo’s chief strategy officer, said from the stage. “But sometimes the stars align.”
‘Thank Me Later’
In February, Eric Trump passed along some investment advice to his followers on Elon Musk’s social media platform, X: “In my opinion, it’s a great time to add $ETH.”
It was the ticker symbol for a digital coin called Ether. “You can thank me later,” he added, before deleting that line.
His advice proved prescient.
The next month, his father announced the creation of a “U.S. Crypto Reserve” — a Fort Knox-like repository of cryptocurrencies intended to help bolster the industry.
Ether
Ether is the second-most valuable cryptocurrency behind Bitcoin, worth about $1,800 at current prices. Many of the most influential crypto companies use the coin to conduct transactions and build financial applications.
Mr. Trump’s announcement included a list of digital currencies to go into the stockpile. Along with Bitcoin, he included Ether, saying it would be “at the heart of the Reserve.”
Ether’s price surged more than 13 percent.
The spike had an immediate beneficiary: World Liberty. Over the previous few months, the company had bought $240 million worth of Ether, according to Arkham, a crypto data firm.
The day the president announced the crypto reserve, the value of World Liberty’s Ether stash rose by $33 million, assuming it had not sold any of its holdings. That gain was later lost as Ether declined in value.
That same pattern — Mr. Trump making policy pronouncements or posting messages that intersected with World Liberty’s business interests — occurred again in March.
In a video feed at a crypto conference in New York, Mr. Trump called on Congress to pass legislation governing stablecoins, a type of crypto designed to maintain a value of $1.
Stablecoin
Stablecoins are a type of cryptocurrency that maintain a constant price of $1. They differ from traditional digital currencies like Bitcoin, which constantly fluctuate in price, making them easier to use for certain types of transactions. Companies that issue stablecoins operate similarly to banks: The issuers make money by taking deposits from investors, giving them coins in return and then investing those deposits to generate a yield that the companies keep.
Both the Senate and the House have introduced bills that would make it easier for firms issuing stablecoins to operate in the United States. In his remarks last month, Mr. Trump said that the rise of stablecoins would “expand the dominance of the U.S. dollar.”
A week later, World Liberty announced it was releasing its own stablecoin, USD1. “The future is here, and it is so bright!” Zach Witkoff wrote on X.
Jordi Alexander, a crypto executive who helped World Liberty with its plans to launch its stablecoin, said in an interview that the company had already secured commitments of at least $1 billion from investors to buy the stablecoin once it hits the market.
The new venture will only compound World Liberty’s ethical conflicts. The company plans to offer USD1 on a platform developed by Binance, a giant exchange that settled criminal charges with the Justice Department in 2023. This week, Mr. Witkoff, Mr. Herro and Mr. Folkman met with Changpeng Zhao, Binance’s founder and former chief executive, in Abu Dhabi.
Mr. Zhao, who served four months in federal prison for money-laundering violations, has been seeking a pardon from the Trump administration, according to people familiar with the matter, who requested anonymity to discuss a sensitive topic. The pardon effort was first reported by The Wall Street Journal.
The overlap between Mr. Trump’s policy pronouncements and his business interests have alarmed congressional Democrats, who moved recently to amend the pending stablecoin legislation to bar the Trump family from issuing one.
The amendment failed, and none of the concerns about World Liberty have disrupted its momentum.
Last month, Mr. Witkoff was among a group of executives invited to the White House for a first-of-its-kind industry summit.
After the meeting, Mr. Witkoff posted a photograph on social media of him smiling outside the White House next to Mr. Herro and Mr. Folkman.
“Thank you Mr. President,” Mr. Witkoff wrote.
Susan C. Beachy contributed research.