The Trump family's crypto project, WLFI, has been exposed for borrowing tens of millions of dollars through related-party agreements, raising concerns about a conflict of interest.

Odaily Odaily reports that World Liberty Financial (WLFI), a crypto project co-founded by the Trump family, has sparked market concerns regarding insider trading, circular financing, and liquidity risks by conducting multiple collateralized lending operations through the DeFi lending protocol Dolomite. Data shows that WLFI has lent out approximately $31.4 million in stablecoins, using its self-issued stablecoin USD1 and its platform token WLFI as collateral. Some of these funds were transferred to Coinbase Prime, suggesting potential use for fiat currency exchange or over-the-counter trading. It's worth noting that Corey Caplan, co-founder of Dolomite, also serves as an advisor to WLFI. Currently, WLFI accounts for approximately 55% of the protocol's deposit liquidity, significantly increasing concentration risk. Furthermore, the USD1 pool utilization rate on Dolomite is as high as approximately 93%, meaning that ordinary depositors may not be able to withdraw their funds at any time, facing liquidity lock-up risk. Additionally, due to the limited market depth of the WLFI token, a price drop triggering liquidation could lead to a cascading sell-off and bad debt risk, ultimately borne by other depositors. On-chain data also shows that WLFI transferred approximately 3 billion tokens (about $266 million) to multiple addresses in early April, the destination of which is currently unclear. As of now, WLFI has not responded to these transactions. (CoinDesk)