Trump-Backed Venture Exploits DeFi Lending Protocol, Raising Concerns About Insider Access

A recent analysis of onchain records has revealed that World Liberty Financial (WLFI), a crypto venture co-founded by the Trump family, has been borrowing large amounts of stablecoins from decentralized finance lending protocol Dolomite. The treasury of WLFI deposited over 14 million $USD1 into Dolomite as collateral and borrowed 11.4 million $USDC against it.

The analysis shows that minutes later, 11.45 million $USDC was moved to a Coinbase Prime deposit address, followed by another transfer of 12.5 million $USD1 from the WLFI treasury to a separate Coinbase Prime deposit address two days later. The latter transaction is notable as it did not involve borrowing from Dolomite.

However, twelve days after the initial deposit, WLFI's treasury deposited 890 million $WLFI into Dolomite and borrowed 20 million $USD1 against it. This was followed by another 1.1 billion $WLFI being deposited on March 24, bringing the total amount of WLFI tokens in Dolomite to 1.99 billion.

The choice of protocol is not incidental, as Dolomite co-founder Corey Caplan serves as an advisor to WLFI. This has raised concerns about insider access and the concentration of risk in the protocol's $USD1 pool.