Trump family Alt5 Sigma crypto venture left investors with steep losses

As part of the August deal, Alt5 acquired $1.5 billion worth of crypto tokens from World Liberty Financial, the crypto company co-founded by Eric Trump and Donald Trump Jr., among others, in 2024. The president and undisclosed members of his family were entitled to roughly $500 million in proceeds from the crypto sale, according to disclosures by World Liberty Financial.

Alt5 closed at $8.97 on Aug. 8, the last trading day before the World Liberty deal was announced. Since then, AI Financial ’s stock — originally trading under the ticker ALTS, now AIFC — fell to 66 cents a share at the June 8 close, a 93% loss, according to FactSet data.

World Liberty was founded in 2024 as a private company by Eric, Donald Jr., and Barron Trump, sons of the president; Zach and Alex Witkoff, sons of Trump Middle East negotiator Steve Witkoff; and business partners Zak Folkman and Chase Herro, according to a company document. Disclosures on World Liberty’s website in early June show that “approximately 38% of the equity interests” in World Liberty’s parent company are owned by “an entity affiliated with Donald J. Trump and certain of his family members.”

Alt5 announced the World Liberty deal on Aug. 11. It had two parts. Alt5 traded shares and stock warrants in itself to World Liberty in exchange for $750 million worth of WLFI tokens, and Alt5 sold $750 million in stock to investors at $7.50 a share. The $750 million in proceeds, minus some fees, was given to World Liberty in exchange for WLFI tokens. All told, Alt5 received nearly 7.3 billion WLFI tokens, which it initially valued at about $1.5 billion. Zach Witkoff, World Liberty’s CEO, became chair of Alt5′s board.

The Trump family is entitled to 75% of the proceeds from World Liberty’s crypto token sales, according to disclosures made in a document World Liberty published in 2024 describing its token offering, and repeated in fine print at the bottom of its website. That would put the Trump family’s direct gains from the August Alt5 transaction at roughly $500 million after fees and other expenses.

Some of these issues, such as the court filing and auditor issue, should have been revealed to investors more swiftly, Canter said. “I started my ethics career at the SEC, and I think they would have started investigating this for just one or two of these failures to disclose,” Canter said.

One potential wrinkle in the investigative process, Canter said, is the Trump family’s recent “anti-weaponization” settlement with the Internal Revenue Service. Under the settlement, acting Attorney General Todd Blanche issued an order releasing Trump from ongoing audits. The settlement’s language is vague and is written in a way that could be interpreted to apply to regulators’ potential investigations of companies related to the Trump family, such as AI Financial, Canter said.