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) undertaking, which suffered a $2.5 million exploit almost a yr in the past.
From Exploited Protocol To Trump’s Crypto Partners
On Monday, Reuters reported that two of President Trump’s enterprise companions, Chase Herro and Zak Folkman, left their prospects 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 yr, the undertaking 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 sensible contract and stole customers’ funds, leaving buyers empty-handed. The protocol’s group 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 property, value 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 value of ETH from the undertaking’s official pockets to 134 addresses in September, a number of buyers reportedly advised Reuters they haven’t obtained such a fee.
In a Medium publish, the DeFi undertaking 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 group vowed.
However two months after the protocol’s collapse, Dough Finance’s co-founders seemingly deserted their prospects to launch their new crypto undertaking, WLFI, alongside President Trump, and his three sons, Donald Jr., Eric, and Barron.
After their new crypto enterprise’s announcement, on-line reviews raised the alarm because the language within the leaked WLFI white paper allegedly was “very similar” to Dough Finance’s.
Dough Finance Clients Left Empty-Handed
Reuters highlighted that Folkman and Herro allegedly promised to not cease “until everyone is made whole” in a message to a Telegram channel with 2,700 Dough Finance customers.
Nonetheless, the DeFi protocol co-founders, seemingly recognized for regularly posting on-line, reportedly stopped updating the undertaking’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 undertaking solely has a Complete Worth Locked (TVL) of $1,689, in accordance with DeFiLlama knowledge.
Dough Finance's TVL by Could 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 almost 300 ETH within the DeFi undertaking based mostly on Herro’s representations.
Ten victims additionally spoke to the information media outlet on situation of anonymity, with one consumer affirming they final heard from Dough Finance 4 months in the past, on January 13, once they promised to “have a solution this week,” however by no means obtained any compensation.
In line with Reuters, Herro and Folkman have made at the very least $65 million from their lower of WLFI’s revenues, based mostly 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
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