Discussion
Senior GOP officials reportedly phoned up Commerce Secretary Howard Lutnick to get him to pressure a pro-crypto super PAC funded by the company he “divested” from to nix a planned ad spend in favor of Texas Senate candidate Ken Paxton.
#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter
@molly0xfff not only did I run out of popcorn while reading your missive, I am concerned that it could cause an overheated popcorn market.
@molly0xfff It's possible Mr. Sun didn't understand what he was actually investing in. He was investing in his freedom, not in any real financial return (though the greater fool principle may still apply).
Bribes are just a different kind of investment.
Last year, the Trump family’s World Liberty Financial project froze the $WLFI tokens belonging to crypto billionaire Justin Sun, their largest token investor, with little explanation. Now he’s suing them for contract violations and fraud, and they’re suing him for defamation.
#crypto #cryptocurrency #USpol #USpolitics #citationNeededNewsletter
@molly0xfff Wait, how were they able to "freeze" anything?
@SnorriSturluson there is a function on the $WLFI smart contract that enables World Liberty to prevent any holder from transferring their tokens. They also subsequently added a feature that allows them to move any holder’s tokens to another wallet (or the “burn” address, meaning they could destroy the tokens — which Sun alleges they threatened to do to him)
@molly0xfff ok, i.e. everything a crypto contract or coin shouldn't do, the whole idea of crypto was that nobody should be able to do that 😜 - The question really is, are people that stupid?
It’s a little rich that Sun is alleging that World Liberty is engaged in fraud, manipulating markets, and potentially violating securities laws after himself only just escaping those very allegations after investing more than $200 million into the president’s family’s crypto projects.
But he also has something of a point: after World Liberty Financial promised they were a solution to “debanking” and that “no one’s ever going to tell you that your account is shut down”, they proceeded to do exactly that to Sun.
#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter
Sun is also attempting a delicate balancing act: accusing the Trump family’s World Liberty Financial of fraud while simultaneously maintaining he is still an “ardent” supporter of Trump and his family. His strategy is to pin the whole thing on WLF co-founder Chase Herro.
#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter
@molly0xfff Those pesky Boyars!!!
In World Liberty’s defamation suit against Sun, they claim that their ability to freeze his tokens was well known to him, and that claiming they installed a secret “backdoor” is defamatory. They also object to him describing WLF’s governance as a sham, and accusing them of treating the crypto community as “a personal ATM”.
#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter
@molly0xfff 😂🤣 omg too funny. Like crabs in a bucket.
Also - I love your work beyond reason. You are spectacular.
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![In elections and political influence
In an April [noted] post, I outlined how the Fellowship PAC, a new pro-cryptocurrency, pro-MAGA super PAC, is primarily funded by Cantor Fitzgerald — the firm previously run by Howard Lutnick before he “divested” by transferring it to his sons when he was appointed Commerce Secretary.
Link to other Citation Needed article: Commerce Secretary Howard Lutnick’s old firm pumps $10 million into super PAC led by Tether executive](https://media.hachyderm.io/media_attachments/files/116/539/500/459/048/772/original/61850df773d32322.png)
![The PAC filed an FEC report announcing planned independent expenditures of $1.75 million to support Republican Senate candidate Ken Paxton in his contentious Texas primary runoff against incumbent John Cornyn.7 Trump has conspicuously declined to endorse either candidate. According to Axios, senior Republican officials called Lutnick to pressure him to cancel the expenditures, which they viewed as a potentially disastrous move.8 “Backing the guy who came in second place [in the GOP state primary] and risk[ing] handing Democrats the Senate is pure political malpractice”, said an NRSC spokesperson about the planned ad spend. While Axios noted that “it was unclear to people familiar with the matter if Lutnick followed up on those phone calls,” the Fellowship PAC later amended the report with the Paxton line item missing and a note that they had “remove[d] an ad with no anticipated air date”.9
Transferring the mega-firm to his 29- and 27-year-old sons was already a highly dubious divestiture. But if GOP officials believe pressuring Lutnick is a worthwhile strategy to influence a super PAC primarily funded by the firm he now supposedly has nothing to do with — and if that strategy apparently works — it’s further evidence that Lutnick has not properly eliminated this massive conflict of interest.](https://media.hachyderm.io/media_attachments/files/116/539/500/494/488/774/original/9213503e79ddfd8c.png)
![Sun v. World Liberty
Sun filed a May 5 lawsuit in a California federal court alleging World Liberty vindictively froze his $WLFI tokens after he refused to invest hundreds of millions of dollars more into minting the project’s stablecoin, USD1, on his Tron blockchain.2 He claims World Liberty threatened to destroy the frozen tokens and report him to US authorities — presumably the very authorities who had mysteriously dropped their investigations and lawsuits against him shortly after his substantial investments into Trump family projects [I102].
Sun alleges that World Liberty fraudulently induced investments by marketing itself as a decentralized finance platform that would free users from what the project’s CEO described as “the big boogeyman behind the curtain” of centralized control, while in fact secretly retaining the power to unilaterally freeze tokens. “Far from freeing its users of centralized control, World Liberty positioned itself as the new boogeyman behind the curtain,” the lawsuit observes with a certain dramatic satisfaction.](https://media.hachyderm.io/media_attachments/files/116/539/472/175/005/424/original/7ce0997f4c31ec0b.png)
![Sun’s lawsuit also repeats his public allegations that World Liberty’s supposedly decentralized community governance is a sham. He alleges that World Liberty co-founder Chase Herro admitted in private communications that governance votes were essentially predetermined, alleging that Herro represented to him that “the World Liberty leadership team controlled a meaningful percentage of the outstanding $WLFI tokens in circulation, and would thus be able to effectively control the outcome of any such vote.”
Sun makes the dramatic claim that World Liberty is “on the brink of collapse and potential insolvency”. As proof, he points to the company’s controversial Dolomite borrowing [I104], and the parallels some have drawn to FTX’s reliance on leveraging self-issued tokens prior to its collapse, as well as the token’s ongoing price decline and World Liberty’s massive payouts to insiders.](https://media.hachyderm.io/media_attachments/files/116/539/475/586/598/763/original/9118bde70be90f7b.png)
![On the one hand, it’s a little rich that Sun is alleging that World Liberty is engaged in fraud, manipulating markets, and potentially violating securities laws after himself only just escaping those very allegations after investing more than $200 million into the president’s family’s crypto projects. And Sun’s lawsuit is selective about which agreements he finds to be binding — while much of the lawsuit is based on promises made in various contracts and marketing materials outlining platform governance and token issuance, Sun also readily admits that he read the claim that WLFI tokens were not investments as mere “disclaimers to avoid application of federal law governing the offering of securities” and that “everybody who purchased the tokens in exchange for real-world dollars knew all along [that] the tokens were expected to become tradable”.](https://media.hachyderm.io/media_attachments/files/116/539/484/023/507/852/original/1c07ae2e76b69deb.png)
![Sun walks a narrow tightrope in his lawsuit, criticizing a Trump family-run cryptocurrency project while simultaneously claiming that he “has long been (and remains) an ardent supporter of President Trump and the Trump family”. He attempts this by aggressively targeting World Liberty co-founder Chase Herro instead, reaching all the way back to alleged drug busts when he was a teenager. Sun portrays Herro as a career grifter whose background is in hawking get-rich-quick schemes. He suggests that Herro owes hundreds of thousands in unpaid taxes and accuses him of making contradictory claims about his primary residency — alternately claiming Puerto Rico or Florida — to dodge both tax liabilities and legal proceedings. He even claims that Herro once boasted about visiting Jeffrey Epstein’s island. And he notes Herro’s participation in a crypto project called Dough Finance shortly before joining World Liberty, and points to speculative tweets suggesting the $2 million hack that ended the project [W3IGG] could have in fact been an insider rug pull.
It’s not immediately clear how Herro’s arrest at 18 for selling drugs or his alleged Epstein connectionb relate to Sun’s contract dispute with World Liberty. Instead, it appears Sun is hoping to remain in the Trumps’ good graces by offering to publicly accept Herro as a scapegoat for whatever wrongdoing may have occurred.](https://media.hachyderm.io/media_attachments/files/116/539/489/377/404/026/original/372598cb1e0d21f4.png)
