The sudden increase and collapse of the finance in the dough
In July 2024, Finance Finance, a Florida-based platform promising to seize “looping” returning, was victimized by a flash-loan exploitation of $ 2.5 million from user accounts. The exploitation not only wiped the investor funds but also brought the operations.
Chase Herro and Zak Folkman founded the financial dough in 2024 in Florida. The platform attracts investors by offering high-risk defi techniques such as loop, a process by which traders use borrowed crypto. Here’s how looping works:
- First, an entrepreneur deposits a crypto asset to a lending protocol. This deposit acts as collateral. Then the businessman borrows another crypto assetOften a stablecoin, based on collateral value.
- Next, the businessman takes the borrowed crypto and buys more than the original owner. The cycle repeats with more deposit and borrowing; This is the process of loop.
The goal is to obtain greater exposure to the original owner. If the price increases, the businessman makes more income than their initial deposit.
However, it all separated from a Flash Loan Attack In July 2024. The hackers that target the defi protocol manipulate the Smart contract and stay away with about $ 2.5 million worth of cryptocurrencies.
The $ 2.5-million loss is the nail in the dough coffin. Investor Jonathan Lopez, who deposited $ 1 million based on encouragement from CO – keeper Chase Herro, saw his savings. He was reported to be advised sequentially by the loop approach before the hack hit.
In spite of the promises to pay users by the owner of tokens that can be replaced back to the ether (Eth), Only $ 281,000 recovered. Communications kept quiet in August 2024, and in May 2025, Lopez had Filed A fraud lawsuit against Herro. His court date was set for Florida in April 2026.
This case refers to a growing trend: users are increasingly looking for legal backwards for failed crypto platforms once unofficial assurances fall.
Relaunch under a new banner: The birth of World Liberty Financial
Almost two months post – collaps, herro and partner Zak Folkman resurrected under a new banner, World Liberty Financial (WLFI), debuting in September 2024.
Their new Defi platform has quickly drawn heads heads thanks to high-profile backers: US president Donald Trump and his sons. The cooperation has been reported to have been taken Shape With Steve Witkoff, a real estate developer and special US envoy in the Middle East, facilitating the connection between embattled founders and Trump camps.
Flush with fresh capital, the project Started with a spree purchaseSinging an ETH portfolio, wrapped bitcoin (Wbtc), USDC (USDC) and USDT by Tether (USDT). To its core is an unstable Management token Called WLFI, an unusual design choice for a platform labeled as “decentralized.”
But these are not the tokens that provoke controversy. It’s a flow of money.
Following two token sales, including a blockbuster round in March 2025, the platform claimed to have raised $ 550 million. However split income is anything but decentralized: 75% of all net protocol revenues were raised at DT Marks Defi, a Trump-associated creature. The remaining 25% went to a company owned by Herro and Folkman.
In real terms, the Trump family has been reported to have pocketed $ 400 million, while former-disjointings founder of finance dough walked away with at least $ 65 million, a dramatic return of fortune for a couple who lost only $ 2.5 million a year before.
Critics quickly call the irony: a platform that shops self -decentralized but operates under a strong centralized structure. Herro and Folkman’s silent re -appearance, especially if the allegations of fraud from their previous adventure remain unresolved, simply added the fuel to the backlash.
World Liberty, however, is just a piece of a wider crypto family ecosystem that grows with surprising speeds.
Trump has launched a Memecoin called the official Trump (Trump) in Solana earlier this year, followed Official Melania Meme (Melania), a similar token released by the first lady. Meanwhile, Eric Trump founded a cryptocurrency mining company called American Bitcoin, along with Donald Trump Jr. listed as a stakeholder. Most recently —but, Trump Media and Technology Group filed a proposal to US SEC On June 5, 2025, to launch a Bitcoin (Btc) Funds exchanged by Exchange (ETF), the reality Social Bitcoin ETF.
Together, these adventures form an increasingly blurred line between politics, personal enrichment and crypto, a line that Herro and Folkman now have.
What promised to financially dough after hack and what did not happen
Although the money was financially dark after the fall of July 2024, the project did not fade from the regulators’ radar. In fact, the legal and investigative spotlight is just now.
Finance of dough released A post-incident recovery plan promised to “make users whole.” The proposal outlines a three -part approach:
- Redistribute recovered funds by a management vote on a pro rata basis.
- Issue dough tokens to compensate for unpleasant losses, with a promise that they can be used within the platform ecosystem.
- The burn-and-redem mechanism that allows users to exchange tokens for further recovery funds in the future.
The platform also recognized SEAL 911, a cybersecurity firm, for support of responding to the incident and emphasized transparency.
However, the affected users say that the material is not in these promises. The management vote was never held, the dough tokens were not listed or available, and no additional funds were recovered despite an initial partial payment of nearly $ 281,000. By June 2025, the platform was silent, leaving investors like Lopez to pursue legal action.
Reported, Lopez’s May 2025 lawsuit accused co-founder Herro of false expression, security fraud and a violation of assurance duty. The case, set for the trial in April 2026, will help determine how the courts manage Defi founders who directly guide investors through high-risk techniques such as loop.
Under Florida’s CS/HB 273, any platform that sends user funds must hold a money shipping license. If financial financial is operated without one, it can deal with regulatory evaluation as an unlicensed monetary service business. Until mid-2025, no criminal charges were filed, but the Florida financial office (OFR) continues to monitor digital property fraud and unregistered security cases, suggesting this may be just beginning.
This pattern of missing communication, vaporware tokens and quiet pivots have drawn comparisons with previous defis that have crushed like SafeMoon and bitconnect. But unlike many defunct founders, Herro and Folkman are not missing – they are re -formed under a new name and big.
Is World Liberty Financial really safe?
After raising $ 550 million and tying itself in Trump’s name, WLFI may look like a strong Defi success story. But for anyone who follows Chase Herro and Zak Folkman’s journey from financial to WLFI, a lingers question: Is it safe?
Warning signs are familiar.
In dough finance, users have been promised to cut off defi techniques and post-hack reimbursement. What they got was rather silence, lost funds and vaporware tokens. Now, in the allegations of fraud are still active, both founders are now controlling a new platform with more capital, more complex and more political weight.
WLFI uses an unobtrusive token management (WLFI) little user control Over Treasury Allocation and Funnels 75% of Protocol revenue in an LLC associated with Trump. It was a big shout from the community-first, decentralized defi ideas that users were told to expect.
So, what can investors learn?
- Trust the track record, not the headlines.
- Just because a project is connected to politics or cash rich in cash does not mean it is transparent, safe or equal.
The WLFI’s rise, built on Shadow of Dough Finance’s Collapse, is a strong reminder: in Defi, “back again” doesn’t always mean “better.”
If you ask if WLFI is safe, consider this: Do you trust your possessions on a platform that founders are not yet answered for the latter?
If your answer is not, you are not paranoid. You pay attention.
In Defi, recycled founders are excluded from recycled liability. If the past is any guide, this project means a close investigation, not blind trust.
