Trump-Backed Crypto Project's Hidden Leverage Sparks FTX Flashback

World Liberty Financial (WLFI), a decentralized finance project co-founded by members of the Trump family, is facing controversy over its use of DeFi lending platform Dolomite.

A series of transactions documented on Etherscan and Arkham Intelligence show that WLFI deposited approximately 5 billion of its governance tokens as collateral on Dolomite, borrowing around $75 million in stablecoins. This represents about 55% of Dolomite's total value locked.

The move has drawn comparisons to Alameda Research's use of FTT as collateral on FTX before its collapse in November 2022.