According to Lee Reiners, a lecturing fellow at Duke University and former Federal Reserve Bank of New York examiner, World Liberty Financial may have issued an unregistered security, he wrote on Friday. Reiners argues that WLFI, the project’s governance token, does not qualify as a pure “digital commodity” under the SEC’s recent token taxonomy. The project sold approximately 25 billion WLFI tokens out of a 100 billion total supply through presale rounds before the World Liberty protocol was fully built, leveraging the Trump family name. Reiners contends that token buyers likely invested with a reasonable expectation of profits—a key component of the Howey Test used to determine if assets are securities.
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