World Liberty Financial, a decentralized finance (DeFi) cryptocurrency project promoted by former President Donald Trump and his sons, will limit its U.S. token sales to a maximum of $30 million, as reported by Bloomberg.
In a recent filing with U.S. regulators, World Liberty stated its intention to restrict U.S. token sales to $30 million. Although the company is incorporated in Delaware, it primarily operates out of Puerto Rico.
Majority of Token Sales to Take Place Offshore
The company currently has around $288.5 million worth of tokens available. Therefore, nearly 90% of its tokens will be sold outside the United States. So far, fewer than 350 U.S. investors have participated in purchasing these tokens.
Regulatory Challenges and SEC Scrutiny
The U.S. Securities and Exchange Commission (SEC), which views tokens as securities, has placed strict regulations on token sales. This makes it difficult for companies to raise funds in the U.S. through token offerings. To navigate this, World Liberty is using an exemption known as Regulation D to sell tokens to U.S. investors.
Understanding Regulation D
Regulation D allows U.S. companies to raise funds from an unlimited number of investors. However, only institutions or high-net-worth individuals, who meet specific criteria, can participate. For instance, individual investors need a net worth of at least $1 million, excluding their primary residence.
Furthermore, companies using Regulation D must file a public notice with details of the offering. This notice includes the amount raised, the number of investors, and information on key individuals involved in the sale.
Token Sales and Investor Participation
According to filings, World Liberty has raised $2.7 million from 348 investors under Regulation D since October 15. While the filing mentions Trump and his sons, Don Jr. and Eric, it clarifies that their names appear only for informational purposes. This does not confirm their official involvement in the offering. Even so, Trump and his sons have endorsed World Liberty as part of a broader DeFi initiative aimed at expanding access to financial services.
International Token Sales and Regulation S Exemption
Co-founder Zachary Folkman explained in a September interview that any future token sales outside the U.S. would use Regulation S. This exemption allows the sale of tokens to non-U.S. investors. Unlike Regulation D, Regulation S has fewer requirements but limits sales strictly to foreign investors.
World Liberty’s token launch follows Trump’s recent release of his fourth collection of non-fungible tokens (NFTs), featuring his likeness.
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