DeFi Project World Liberty Financial Faces Regulatory Scrutiny

World Liberty Financial (WLFI), a decentralized finance (DeFi) initiative linked to Donald Trump's family, has been put under the spotlight by a Duke University expert.

Lee Reiners, an academic at Duke University, has published an analysis arguing that WLFI's token does not qualify as a pure 'digital commodity.' Instead, he contends that it meets the Howey Test criteria for being considered a security.

The Howey Test is a framework used by the Securities and Exchange Commission (SEC) to determine which assets constitute securities. According to Reiners, WLFI buyers likely invested capital with a reasonable expectation of profit, making the token a security.