TL;DR
- World Liberty Financial, partly owned by the Trump family, plans to tokenize loan interest related to the Trump International Hotel and Resort in the Maldives
- Investors gain exposure to future interest payments, not ownership of the property itself
- According to CryptoSlate, the company has generated at least $1.2 billion in cash for the Trump family over 16 months
- Several experts and regulatory bodies warn of conflicts of interest and regulatory risks
Resort Debt Packaged as Crypto Token
World Liberty Financial, the crypto company where Trump's sons Eric and Donald Jr. are key co-founders, is now entering the structured credit market. The plan is to issue tokens that give investors exposure to future interest payments related to the financing of the Trump International Hotel and Resort in the Maldives — a project scheduled for completion in 2030, according to CryptoSlate.
This is not a real estate purchase. Investors who subscribe do not get a share in the hotel itself, but rather a contractual right to a share of the projected interest streams from the loan financing the development.
The tokens will be offered in a private placement exclusively to verified accredited investors.
$1.2 Billion in 16 Months
World Liberty Financial has proven to be a very profitable structure for the Trump family. The company's own disclosures indicate that 75 percent of all revenue from the sale of WLFI tokens goes directly to a Trump-controlled entity. According to CryptoSlate, this has generated at least $1.2 billion in cash over a 16-month period, in addition to $2.25 billion in unrealized gains from crypto holdings.
What Exactly is Tokenized Real Estate Debt?
Tokenization of real estate debt is a growing field where traditional loan interest or debt instruments are converted into digital tokens on a blockchain. It allows for fractional ownership and, in theory, increased liquidity in an otherwise illiquid market.
Consulting firm Deloitte estimates that the global market for tokenized assets could grow to $4 trillion by 2035, up from under $300 billion in 2024. In early 2018, the Aspen St. Regis Resort conducted one of the first SEC-approved tokenizations, raising $18 million from accredited investors.
Significant Regulatory Risks
Tokenized real estate debt is classified in most jurisdictions as a security, which triggers requirements for registration or exemptions under applicable securities laws. In the US, the SEC uses the so-called Howey Test to assess this.
From a regulatory perspective, these types of structures are complex:
- Investor protection: Secondary markets for tokenized real estate debt are often thin or non-existent, which can make it difficult to sell out
- SPV structure: Best practice is to use a Special Purpose Vehicle (SPV) between the investor and the underlying asset — but poorly structured SPVs can offer token holders little real protection in case of insolvency
- Smart contract risk: The entire construction relies on smart contracts that could theoretically contain vulnerabilities
- Tax ambiguity: The tax treatment of such token transactions remains unclear in many countries
Conflicts of Interest Under Scrutiny
What makes this case politically charged is that Trump is now the US president and simultaneously the primary promoter of his own crypto company. Richard Briffault, a law professor at Columbia University and ethics expert, has characterized the situation as “doubly corrupt” to the media, referring to Trump operating as his own chief regulator while selling access to himself via crypto products.
“Trump's dealings in crypto appear to present the greatest conflicts of interest and avenues for corruption any president has ever embraced” — Larry Noble, former General Counsel of the Federal Election Commission
Senator Elizabeth Warren, for her part, has claimed that Trump is enriching himself and his family through crypto activities while his administration weakens market oversight. The Trump camp rejects these accusations, pointing out that business interests are managed by his children in a trust.
It should be emphasized that the claims of conflict of interest are currently political accusations from opponents, and no formal legal cases have been filed specifically related to the Maldives project.
What Happens Next?
The resort in the Maldives is scheduled for completion in 2030, and the token offering is aimed at accredited investors in a private placement. World Liberty Financial has not published full prospectus details, and it is currently unclear which blockchain will be used, or what the specific interest rate for investors will be.
That a sitting president is directly linked to a company selling unregulated financial instruments to private investors is, in any case, an unprecedented situation in the US — and something the crypto industry globally will follow closely going forward.
