Former President Donald Trump’s World Liberty Financial project will limit token sales in the U.S. to $30 million, as reported by Bloomberg. The company, based in Delaware but operated from Puerto Rico, has nearly $300 million worth of tokens for sale, with the majority of sales, almost 90%, set to occur outside the U.S. So far, less than 350 U.S. investors have purchased these tokens.
To comply with U.S. regulations, World Liberty is utilizing an exemption known as Regulation D to sell tokens to American investors. This exemption allows companies to raise unlimited funds from a limitless number of investors, as long as they meet specific criteria such as being institutions or wealthy individuals with a net worth exceeding $1 million, excluding their primary residences.
The U.S. Securities and Exchange Commission (SEC) has been closely monitoring token sales, considering them as securities. Companies like World Liberty must adhere to strict requirements under Regulation D, including filing public notices detailing the offering amount, number of investors, and key individuals involved in the sale. Since October 15, World Liberty has raised $2.7 million from 348 investors through Regulation D sales.
While the filing mentions Donald Trump and his sons, Don Jr. and Eric, as associated with World Liberty, it clarifies that their involvement is for informational purposes and does not indicate official promotion of the offering. The Trump family has been advocating for World Liberty as part of the DeFi movement to democratize financial services access.
In addition to token sales, World Liberty recently launched Trump’s fourth collection of non-fungible tokens (NFTs) featuring the former president. Co-founder Zachary Folkman mentioned that any potential token sales outside the U.S. would occur under Regulation S, which has fewer requirements compared to Regulation D but limits fundraising to foreign investors exclusively.
It is essential for companies like World Liberty to navigate the complex regulatory landscape surrounding token sales to ensure compliance with U.S. laws while continuing to drive innovation in the DeFi space. The involvement of prominent figures like Donald Trump and his family adds an additional layer of interest and scrutiny to projects like World Liberty Financial. As the crypto industry evolves, regulatory clarity and transparency will be crucial for the success and sustainability of decentralized finance initiatives.
