According to a Forbes article, Eric Trump will no longer be a member of fintech firm Alt5 Sigma’s board, after all. The company has stripped him of his board role following a consideration by Nasdaq. This comes after a $1.5 billion funding deal with World Liberty Financial (WLFI).
Background of Alt5 Sigma’s Agreement with Eric Trump
Alt5 Sigma was originally intended to have Eric Trump on its board of directors as part of its aggressive fund-raising effort. This included selling stock in an effort to raise money to purchase WLFI tokens. However, following negotiations with Nasdaq regarding how it was going to be able to meet listing standards, the company shifted gears. Zak Folkman, a WLFI co-founder, has now been nominated as a director pending stockholder approval.
Details in the SEC Filing
In a recent SEC filing, Alt5 Sigma indicated that Trump’s participation has shifted. The company did not specify what Nasdaq rule affected the determination. Interestingly, Trump affiliation-driven LLC possesses approximately 38% of the business and approximately 22.5 billion WLFI tokens with the entitlement to receive approximately 75% of token sale proceeds.
Alt5 Sigma Legal Issues
The SEC filing also contained Alt5 Sigma’s ongoing legal problems. Its Rwandan subsidiary had recently been found guilty of money laundering by a Rwandan court, which sentenced forfeiture of $3.5 million and shut down the subsidiary. Alt5 Sigma has appealed the judgment, claiming that it was unaware of the ruling until late August.
In addition to that, the firm also went public that it received a subpoena to answer for a case of bankruptcy filed against its previous CFO. He is accused of not disclosing 330,000 shares worth restricted stock units, and U.S. trustees are seeking their seizure.
Implications for the WLFI and the Trump Family
The Trumps’ excursion into crypto enterprise has picked up steam since Donald Trump came back into office. World Liberty Financial has been one of their key parts of their online enterprises. Even despite Eric Trump’s withdrawal, the family retains a significant interest in WLFI and associated ventures.
WLFI is trading at $0.19 as of the writing of this, 11% down in the last week. The token went live early in September, and Alt5 Sigma’s holding has grown substantially, worth around $1.5 billion.
The removal of Eric Trump from the board of directors of Alt5 Sigma following a Nasdaq review underscores fintech regulatory convergence. With the company beset by legal battles and raising capital, its business relationship with the Trump family is precarious.
