Trump-Backed DeFi Project Echoes FTX Collapse in Self-Referential Structure

World Liberty Financial (WLFI), a DeFi project co-founded by members of the Trump family, has been accused of engaging in a self-referential structure similar to that which led to FTX's collapse.

In February 2026, WLFI deposited USD1 into Dolomite, a DeFi lending platform, and borrowed $65.4 million in stablecoins against its own governance token as collateral.

This transaction drew comparisons to Alameda Research's use of FTT on FTX before its collapse, but unlike the latter, WLFI's borrowing is happening transparently on a public blockchain.

The controversy centers around WLFI's use of Dolomite, which was co-founded by Corey Caplan, an adviser and reportedly the Chief Technology Officer of World Liberty Financial itself. This creates a conflict of interest, as WLFI is essentially borrowing its own stablecoin from a protocol advised by its own insider.