The Context 161: 🔝 Donald Trump Jr. proclaims he was “at the top of the Ponzi scheme”

World Liberty Financial co-founder, 1789 Capital General Partner, advisor to both Polymarket and Kalshi, Triggered podcast co-host, and Public Square Holdings director, Donald Trump Jr., recently proclaimed that the reason World Liberty Financial has had to make some of the choices it has is because he and his brother, Eric, were “at the top of the Ponzi scheme that was banking.”

There are several important things to note here, starting with the simple statement that banking is not a Ponzi scheme.

Ponzi schemes are inherently fraudulent enterprises in which investors are paid unsustainable returns by squeezing funds from new investors on the basis of misrepresentation.

This doesn’t describe banking, and pretending it does serves to legitimize fraudulent schemes.

Secondly, knowingly participating in a fraudulent scheme, including a Ponzi scheme, is deeply unethical. Any gains you receive from your participation are inherently due to deceiving other participants.

Is Junior trying to admit that in the process of banking they participated in deception at the expense of others?

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Furthermore, World Liberty Financial itself is trying to participate in banking. Does that mean that Junior believes the project he co-founded is now going to be engaged in inherently fraudulent practices?

Obviously he doesn’t actually believe these things, because he doesn’t actually believe that banking is a Ponzi scheme; he’s just trying to promote projects he’s connected to.

If WLFI was a security, instead of a governance token that’s regularly ignored, it would be problematic for a co-founder to misrepresent things in the hopes of benefitting the tradable asset.

Luckily, World Liberty insists WLFI isn’t a security.

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It feels especially egregious for Junior to be bragging about how easy it was for him to get a loan and to compare the entities giving him the loan to frauds when it was his father who deceived them when he was trying to obtain mortgages.

It feels even more egregious when we know that Junior both approved of and signed the illegal reimbursement payments from the Trump Organization to his father’s fixer, Michael Cohen.

Maybe Junior can help explain why, instead of launching the Aave instance that WLFI holders approved, the project he founded decided to launch a Dolomite instance without consulting with tokenholders.

If Junior wants to find fraud, he should ignore banking and look a little closer to home.

— Bennett Tomlin