Two of US President Donald Trump’s companions from his World Liberty Monetary (WLFI) crypto enterprise have been accused of abandoning buyers from a earlier Decentralized Finance (DeFi) challenge, which suffered a $2.5 million exploit practically a 12 months in the past.
From Exploited Protocol To Trump’s Crypto Companions
On Monday, Reuters reported that two of President Trump’s enterprise companions, Chase Herro and Zak Folkman, left their clients from DeFi Protocol Dough Finance deserted after the platform was exploited.
Dough Finance, co-founded by Herro and Folkman, was an open-source protocol to create non-custodial liquidity markets. Final 12 months, the challenge suffered a flash mortgage assault that took over $2.55 million in USDC and Ethereum (ETH).
As reported by Bitcoinist, on July 12, a hacker manipulated Dough Finance’s good contract and stole customers’ funds, leaving buyers empty-handed. The protocol’s crew despatched an on-chain message to the exploiter providing a white hat bounty if the funds have been returned.
By late July, solely 76.2 ETH of the misappropriated crypto belongings, price round $281,000, had been recovered by cybersecurity agency SEAL 911 and promised to be distributed to crypto buyers.
Nevertheless, regardless of distributing round $180,000 price of ETH from the challenge’s official pockets to 134 addresses in September, a number of buyers reportedly advised Reuters they haven’t acquired such a cost.
In a Medium submit, the DeFi challenge apologized, acknowledging the code vulnerabilities that enabled the hack. “We’ll proceed to work diligently to guard our customers and their belongings, studying from this incident to boost our safety posture,” the crew vowed.
However two months after the protocol’s collapse, Dough Finance’s co-founders seemingly deserted their clients to launch their new crypto challenge, WLFI, alongside President Trump, and his three sons, Donald Jr., Eric, and Barron.
After their new crypto enterprise’s announcement, on-line stories raised the alarm because the language within the leaked WLFI white paper allegedly was “very related” to Dough Finance’s.
Dough Finance Prospects Left Empty-Handed
Reuters highlighted that Folkman and Herro allegedly promised to not cease “till everyone seems to be made entire” in a message to a Telegram channel with 2,700 Dough Finance customers.
Nonetheless, the DeFi protocol co-founders, seemingly identified for regularly posting on-line, reportedly stopped updating the challenge’s Telegram and X accounts after August 18 and deleted one other Telegram group.
Moreover, the Dough Finance web site has been shut down, and the challenge solely has a Whole Worth Locked (TVL) of $1,689, in response to DeFiLlama knowledge.
Dough Finance’s TVL by Might 19, 2025. Supply: DeFiLlama
The report notes that an investor has sued Herro in Florida for fraud, misrepresentation, breach of monetary duties, and securities regulation violations. The lawsuit, filed on January 27, 2025, argues that Jonathan Lopez, a Dough Finance buyer, had invested practically 300 ETH within the DeFi challenge primarily based on Herro’s representations.
Ten victims additionally spoke to the information media outlet on situation of anonymity, with one person affirming they final heard from Dough Finance 4 months in the past, on January 13, after they promised to “have an answer this week,” however by no means acquired any compensation.
In accordance with Reuters, Herro and Folkman have made not less than $65 million from their reduce of WLFI’s revenues, primarily based on disclosed shares of proceeds from the sale of greater than $550 million in tokens.
Ethereum’s efficiency within the one-week chart. Supply: ETHUSDT on TradingView
Featured Picture from Unsplash.com, Chart from TradingView.com
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