World Liberty Financial Targets $300 Million Crypto Offering Mainly for International Investors
World Liberty Financial, a decentralized finance (DeFi) initiative supported by former President Donald Trump, has announced a $300 million crypto token offering primarily targeting international investors. So far, fewer than 350 US investors have participated, raising concerns about the project's domestic viability amid regulatory scrutiny from the US Securities and Exchange Commission (SEC).
World Liberty Financial’s Offshore Focus
Based in Wilmington, Delaware, but managed from Puerto Rico, World Liberty recently filed a notice with US regulators to sell only $30 million worth of tokens domestically. After reaching this amount, the company plans to cease US offerings, despite having around $288.5 million in WLF tokens available for sale.
Zachary Folkman, co-founder of World Liberty, indicated in a September interview that the firm will utilize Regulation S, which permits token sales to non-US investors without the usual requirements set by US securities laws. Limited interest from US investors may be attributed to the SEC's stringent regulations, leading many token issuers to focus on offshore markets.
Trump and his sons, Donald Jr. and Eric, are mentioned in company filings, but their names are included merely for informational purposes and do not signify official support for the offering.
Capital Raising In A Complex Crypto Landscape
In the September interview, Folkman discussed potential non-US sales via Regulation S but did not specify how tokens would be distributed between domestic and international buyers. US investors are approached through Regulation D, allowing unlimited capital raising from accredited investors—individuals with a net worth exceeding $1 million, excluding their primary residence.
Both Regulation D and Regulation S aim to simplify capital-raising processes; however, Regulation D imposes stricter investor protections and disclosure requirements. Companies using Regulation D must publicly disclose details about the offering, including total amounts raised and participating investors. Folkman noted the importance of verifying that US buyers meet accredited investor criteria, complicating the process.
As of October 15, World Liberty reported raising $2.7 million under Regulation D from 348 investors. Analytics from Kaiko indicate that approximately 17,000 unique addresses have held the asset at least once, suggesting broader interest beyond US sales.
The difference between US and offshore sales may be partly due to the anonymity provided by Regulation S, which does not require private companies to disclose capital-raising details or verify buyer financial status. However, it mandates that offerings be restricted to non-US persons to comply with international investment regulations.
Folkman reiterated the company's commitment to regulatory compliance, stating that any potential non-US token sale would be limited to non-US persons and adhere to the applicable restrictions under Regulation S.
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