Donald J. Trump’s new cryptocurrency venture is being spearheaded by serial entrepreneurs who have a history of unpaid debt, tax liens, and lawsuits.
Chase Herro is an Internet salesperson who boldly considers himself a “dirtbag of the internet,” able to sell anything to anyone. Zachary Folkman owned a business called Date Hotter Girls and provided tips on how to approach women at bars while operating under a false identity.
The two men have been serial entrepreneurs for the previous few decades, leaving a trail of lawsuits, unpaid bills, and unfiled taxes.
They currently work as business associates of former President Donald J. Trump.
World Liberty Financial, a cryptocurrency company that Mr. Trump and his three sons unveiled on a livestream last month, is led by Mr. Herro and Mr. Folkman. The Republican front-runner for president claimed that his new business would contribute to making the US “the crypto capital of the world.”
Donald Trump Jr., his eldest son, predicted that Mr. Herro and Mr. Folkman would work together to create a digital dollar-based financial revolution. “They’ll smoke everyone in the room if you put them in a Goldman Sachs boardroom,” he declared.
Regarding the company, the former president’s role, and his partners, some cryptocurrency specialists have voiced skepticism, if not outright panic. Cornell University economics professor Eswar Prasad stated that neither Mr. Herro nor Mr. Folkman seemed to have the necessary financial or technical know-how to make the business succeed.
The idea behind it was touted as revolutionary, but according to John Reed Stark, a former senior officer with the Securities and Exchange Commission, it appeared to be comparable to previous successful cryptocurrency enterprises.
“It’s a terrible opportunity for investors, and it’s a bunch of nonsense,” he declared.
The idea is a part of Mr. Trump’s remarkable attempt to combine his quest for political power with his personal finances. On a social media network run by the Trump Media & Technology Group, Mr. Trump runs a daily campaign. Since declaring his intention to run for office again, he has offered digital trading cards, gold hightop sneakers, Bibles, silver coins, and, as of last week, watches with diamond encrustation all with his name, likeness, or campaign slogans.
Like his social network company, his new crypto business stands out for its potential conflicts of interest. Should Mr. Trump win the presidency, he will have the ability to shape the laws that might make or break World Liberty Financial. Mr. Trump has already suggested he opposes strict federal action in the business, which today operates in a legal gray area.
The presidential candidate entering into a relationship with two unknown 39-year-olds in a high-risk industry so soon before Election Day seemed somewhat unbelievable, even to the project’s founders.
“If you would have thought six months ago that Donald Trump is dropping a decentralized finance project, would anyone have believed it?” Mr. Folkman asked on the livestream announcing the project. Especially, the event’s moderator added, “with two crypto punks.”
Trump’s Development
Even Mr. Trump stated that cryptocurrency “seems like a scam” as late as 2021. According to the FBI, widespread fraud cost Americans billions of dollars just last year.
However, Mr. Trump claimed last month that after talking with his sons about the technology, who were excited about its possibilities, his opinions began to shift.
About nine months ago, when Mr. Herro and Mr. Folkman were acquainted with the Trump family through real estate developer Steve Witkoff and his son Zachary, an investor in cryptocurrency projects, World Liberty Financial began to take shape.
Mr. Witkoff is a personal friend of Mr. Trump’s who contributes money to a political action committee that supports him. He was playing golf with Mr. Trump at the time of the most recent attempt on the former president’s life, and he provided testimony for Mr. Trump in the former president’s civil fraud trial held in New York this year.
A individual who asked to remain anonymous in order to discuss a private conversation claims that Mr. Witkoff is not an expert in cryptocurrency and that he pronounces the term “memecoin,” a kind of digital money, incorrectly as “me me coin.” However, the source stated that he thought the idea would benefit Barron, the youngest Trump son and an 18-year-old college freshman, by providing him with business experience and guiding him away from more dubious areas of the cryptocurrency industry.
The New York Times examined the company’s promotional materials and found that Barron was a “visionary” in the crypto space.
Its business strategy is still unclear. One source working with the business, who spoke on the condition on anonymity to discuss the confidential planning, said the platform will permit borrowing and lending in cryptocurrency. The company isn’t owned or run by Mr. Trump, the Trump Organization, or any members of the Trump family, according to the promotional materials, though they might get paid.
