How Trump’s Crypto Business Partners Left Their Old Clients in the Lurch
By Lawrence Delevingne
Boston, May 19, 2025 – In a striking turn of events, partners of former President Donald Trump in a new cryptocurrency venture have left their previous clients, including investors, feeling abandoned following a significant breach at their original startup, Dough Finance, last summer.
The Rise and Fall of Dough Finance
In May 2024, Jonathan Lopez, a Miami-based investor, placed approximately $1 million into Dough Finance, attracted by its innovative trading platform that allowed users to enhance their positions through a method known as "looping." This approach enables traders to borrow against their crypto holdings to amplify their investments further. Initially, Lopez saw positive returns, aided by the guidance of Dough co-founder Chase Herro, who was enthusiastic about the platform’s potential.
"You get reward(s) for the risks we take," Herro had expressed to Lopez, encouraging him to engage with the high-risk trading strategies offered by the platform.
However, on July 12, 2024, disaster struck. A hack wiped out approximately $2.5 million in customer funds, leaving Lopez and others devastated. Following the incident, Dough Finance’s management admitted to vulnerabilities in their system, pledging to improve security and make affected clients whole again. "We will continue to work diligently to protect our users and their assets," the company stated in a post-hack report.
Abrupt Leadership Change and New Ventures
Despite these promises, two months later, Herro and co-founder Zak Folkman were associated with a new venture called World Liberty Financial, which was backed by Donald Trump and his sons, Don Jr., Eric, and Barron Trump. The connection was reportedly facilitated by Trump’s Middle East envoy, Steve Witkoff, who aligned the Trumps with the duo’s digital finance plans.
The Trump family has since derived significant financial benefits from this partnership, with reports estimating that Herro and Folkman have garnered at least $65 million from World Liberty Financial’s activities, alongside the Trump family’s own earnings of around $400 million from token sales.
Legal Repercussions and Client Fallout
In response to the loss from the Dough Finance hack, Lopez has filed a lawsuit against Herro, alleging fraud, misrepresentation, and breach of fiduciary duties, among other claims. Lopez’s attorney, Joseph Pardo, argues that his client invested heavily based on assurances from Herro. The lawsuit seeks full restitution, punitive damages, and associated legal fees.
In defense, Herro’s legal representatives have called for the dismissal of the case, asserting that Lopez, as a "sophisticated" investor, should have understood the inherent risks associated with cryptocurrency trading. They contend that the hack itself was beyond Herro’s control. A trial date has been scheduled for April 2026 in a Miami federal court.
Broader Implications for Cryptocurrency Regulation
The fallout from Dough Finance and World Liberty Financial highlights broader concerns regarding the regulatory landscape of cryptocurrency in the United States. The emergence of ventures involving political figures such as Donald Trump raises questions around ethical business practices and the potential for conflicts of interest. Critics have noted that the Trump family’s investment activities within the crypto space could be a test of compliance with laws governing how officeholders can monetize their positions.
Recent developments include the Trump Organization’s announcement that Trump’s assets would be managed in a trust by his children, distancing himself from day-to-day operations while permitting his family to benefit from these ventures.
The Aftermath for Affected Investors
For the victims of the Dough Finance hack, the path to recovery remains uncertain. Once a platform is compromised, assets stolen by hackers are often irretrievable, leading to an uphill battle for affected clients seeking to reclaim their investments through legal means. According to a report from Chainalysis, over $2.2 billion in funds were lost to hacking incidents in 2024 alone, underscoring the risks in decentralized finance platforms like Dough.
Lopez’s situation represents not only a personal struggle but also a microcosm of the challenges facing crypto investors at large in the current landscape. As the world of digital finance continues to evolve rapidly, the necessity for heightened security and regulatory frameworks is more apparent than ever.
With the ongoing developments in this story, many are left to wonder whether the players in this high-stakes financial arena will be held accountable for their actions and how such events might shape the future of cryptocurrency investment in the United States.
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