Trump Family's Crypto Token Raises Unregistered Security Concerns

A recent analysis by a Duke University law instructor has shed light on the potential regulatory implications of the Trump family's World Liberty Financial (WLFI) token. The token, which was sold to raise capital for a cryptocurrency business venture, may qualify as an unregistered security under US federal law.

The instructor, who teaches cryptocurrency regulation at Duke University School of Law, argued that WLFI's structure and marketing create a clear expectation of profit for investors, satisfying the core element of the Howey Test. The test determines whether a transaction constitutes an investment contract and thus a security.

Additionally, the analysis highlighted recent legal developments that undermine claims of decentralization often used by crypto projects to avoid securities classification. The instructors noted that while WLFI's backers describe it as a simple governance token, its reality is more complex.