Author: Jack Inabinet, Bankless; Translated by: Deng Tong, Golden Finance

Donald Trump is likely to be the biggest star in the issuance of crypto tokens in history. In addition to the NFT transaction card collection, the 47th President of the United States has released two different tokens for crypto enthusiasts to imitate.

While regulators have released limited information on how they intend to regulate the crypto industry, a careful study of the unique facts and circumstances of Trump’s two tokens may generate important insights into how he can apply it to digital assets.

Today, we will uncover the significant difference between WLFI and TRUMP, trying to understand how Trump regulates crypto tokens.

World Liberty Financial is a DeFi project related to the Trump family. Although practical applications have not been deployed yet, the current development plan shows that World Liberty Financial will become a fork for Aave Aave V3, a popular Ethereum native cryptocurrency lending market.

While there is no real-time protocol, World Liberty Financial has decided to deploy its own token, WLFI, which can be purchased on the Ethereum blockchain with a total supply of 25 billion.

While not explicitly declared as a digital asset securities, only persons exempt from compulsory registration under SEC regulations D and S (i.e., recognized U.S. and unauthorized international investors) can invest in WLFI due to the inherent regulatory uncertainty of token sales.

In addition, to ensure that the token does not fall into the hands of investors who do not meet WLFI sales standards, the token is subject to transfer restrictions, meaning it cannot be sent between wallets or sold on the open market.

Similar to stockholders, WLFI holders have the right to submit and approve future governance proposals that shape World Liberty Financial, similar to investment funds, the World Liberty Financial team can conduct financial management activities at their own discretion.

At the eve of President Trump’s inauguration of the crypto dance, this aptly named TRUMP token was deployed to Solana Solana, a memecoin with a portrait of Donald and last name.

As explicitly stated on the official website of TRUMP Tokens, this memecoin is not an “investment opportunity, investment contract or any type of securities”.

The user who visits the TRUMP token website is instructed to purchase tokens using the centralized encrypted portal Moonshot, which requires the user to provide personally identifiable information for regulatory purposes, butAnyone can purchase such digital assets without a license through popular decentralized Solana exchanges such as Jupiter.

While President Trump publicly mentioned his related memecoin, the TRUMP token has neither a roadmap nor practicality, and its developers have not promised to provide such features in the future.

Trump’s two tokens have very different requirements for buyers, and while anyone can buy a Trump meme, only recognized U.S. and unapproved international investors can participate in WLFI.

While U.S. financial regulators have not yet enacted the composition of digital asset securities, it is certain that U.S. President and de facto SEC Chairman Donald Trump will not knowingly violate applicable securities regulations.

In view of this framework, the unique facts and circumstances surrounding this offering seem to suggest that any practical token (including governance rights or cash flow rights) may be subject to the jurisdiction of the U.S. Securities and Exchange Commission as a digital asset securities.

In contrast, digital asset collections (such as memecoin) may be explicitly non-financial products, thus exempting from regulatory and registration requirements.

We certainly don’t have all the answers, but Trump has shown a desire to build the United States into the world’s cryptocurrency capital, and his administration has also prioritized feedback on how existing laws are applied to digital assets, so in the near future, most areas of the cryptocurrency industry may be subject to securities regulation.

While this development may undermine the current market balance and cause some tokens to lose investor preference, regulation itself is not a bad thing for an industry seeking mass adoption; it will open an unprecedented era of access and innovation for blockchain technology!

To cooperate with large companies, such as financial institutions that control funds and bear huge compliance burdens, the cryptocurrency industry must first achieve compliance.