Duke Lecturer Argues Trump-Linked World Liberty's WLFI Token Is Unregistered Security

According to Lee Reiners, a Duke University lecturer and former Federal Reserve examiner, on Friday World Liberty Financial's WLFI token may constitute an unregistered security despite the project's governance token claims. Reiners cited the SEC's recent token taxonomy, noting that WLFI does not qualify as a pure digital commodity and likely faces SEC scrutiny. He argued that WLFI buyers invested capital with reasonable expectations of profit—a key component of the Howey Test—citing that the token was sold before the protocol was built and leveraged the Trump family name.

Reiners also highlighted World Liberty's self-dealing arrangements, including a $75 million stablecoin borrowing arrangement with the Dolomite lending protocol using 5 billion WLFI as collateral. He referenced a lawsuit by Justin Sun alleging World Liberty froze his tokens and blocked governance rights, stating: "Sun's allegations, if true, reveal that World Liberty retained sweeping unilateral control over WLFI."