Two of US President Donald Trump’s partners from his World Liberty Financial (WLFI) crypto venture have been accused of abandoning investors from a previous Decentralized Finance (DeFi) project, which suffered a $2.5 million exploit nearly a year ago.
From Exploited Protocol To Trump’s Crypto Partners
On Monday, Reuters reported that two of President Trump’s business partners, Chase Herro and Zak Folkman, left their customers from DeFi Protocol Dough Finance abandoned after the platform was exploited.
Dough Finance, co-founded by Herro and Folkman, was an open-source protocol to create non-custodial liquidity markets. Last year, the project suffered a flash loan attack that took over $2.55 million in USDC and Ethereum (ETH).
As reported by Bitcoinist, on July 12, a hacker manipulated Dough Finance’s smart contract and stole users’ funds, leaving investors empty-handed. The protocol’s team sent an on-chain message to the exploiter offering a white hat bounty if the funds were returned.
By late July, only 76.2 ETH of the misappropriated crypto assets, worth around $281,000, had been recovered by cybersecurity firm SEAL 911 and promised to be distributed to crypto investors.
However, despite distributing around $180,000 worth of ETH from the project’s official wallet to 134 addresses in September, several investors reportedly told Reuters they haven’t received such a payment.
In a Medium post, the DeFi project apologized, acknowledging the code vulnerabilities that enabled the hack. “We will continue to work diligently to protect our users and their assets, learning from this incident to enhance our security posture,” the team vowed.
But two months after the protocol’s collapse, Dough Finance’s co-founders seemingly abandoned their customers to launch their new crypto project, WLFI, alongside President Trump, and his three sons, Donald Jr., Eric, and Barron.
After their new crypto venture’s announcement, online reports raised the alarm as the language in the leaked WLFI white paper allegedly was “very similar” to Dough Finance’s.
Dough Finance Customers Left Empty-Handed
Reuters highlighted that Folkman and Herro allegedly promised not to stop “until everyone is made whole” in a message to a Telegram channel with 2,700 Dough Finance users.
Nonetheless, the DeFi protocol co-founders, seemingly known for frequently posting online, reportedly stopped updating the project’s Telegram and X accounts after August 18 and deleted another Telegram group.
Additionally, the Dough Finance website has been shut down, and the project only has a Total Value Locked (TVL) of $1,689, according to DeFiLlama data.
Dough Finance's TVL by May 19, 2025. Source: DeFiLlama
The report notes that an investor has sued Herro in Florida for fraud, misrepresentation, breach of financial duties, and securities law violations. The lawsuit, filed on January 27, 2025, argues that Jonathan Lopez, a Dough Finance customer, had invested nearly 300 ETH in the DeFi project based on Herro’s representations.
Ten victims also spoke to the news media outlet on condition of anonymity, with one user affirming they last heard from Dough Finance four months ago, on January 13, when they promised to “have a solution this week,” but never received any compensation.
According to Reuters, Herro and Folkman have made at least $65 million from their cut of WLFI’s revenues, based on disclosed shares of proceeds from the sale of more than $550 million in tokens.
Ethereum's performance in the one-week chart. Source: ETHUSDT on TradingView
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