Trump-Linked ALT5 Sigma Shakes Up Leadership Amid WLFI Scrutiny
Las Vegas-based Alt5 Sigma Corp, a blockchain infrastructure company that recently tied itself to a Trump family crypto venture, has removed its acting chief executive officer, Jonathan Hugh, and chief operating officer, Ron Pitters. The dismissals occurred shortly after the company entered a $1.5 billion agreement to acquire WLFI digital tokens from World Liberty Financial, a project co-founded by members of former U.S. President Donald Trump's family.
The leadership shakeup comes amid increasing scrutiny regarding potential securities violations and a controversial deal involving World Liberty Financial (WLFI) tokens. The WLFI token agreement stipulates that a Trump-affiliated entity is entitled to 75% of the proceeds from WLFI token sales, potentially yielding over $500 million for the family if the project gains traction.
The company stated in a filing to the U.S. Securities and Exchange Commission (SEC) that its CEO was officially suspended on October 16. However, internal emails show that the company's board had already placed the CEO on "temporary leave" as early as September 4. Several securities regulation experts have indicated that this significant timing discrepancy may constitute a violation of disclosure rules. The same email also revealed that Chief Revenue Officer Vay Tham was placed on leave at the same time, as the board's special committee is investigating “certain matters related to the company".
SEC regulations require public companies to disclose any major changes in executive duties within four trading days of the actual change. Failure to do so, or deliberately submitting false or misleading information, may constitute a violation of anti-fraud regulations.
Adding to the complexity, Alt5 Sigma's shift to a digital asset treasury model triggered an 80% stock plunge amid regulatory scrutiny and leadership turmoil. U.S. regulators probed abnormal trading patterns while the CEO's suspension and Rwanda's money laundering conviction remained undisclosed. Shareholders accuse the Trump-backed WLFI partnership of a "money grab," as the token dropped 34% post-listing.
The company has remained silent on the matter, with a spokesperson for World Liberty Financial offering only vague optimism about their partnership. The Information reported that internal communications warned staff of potential litigation and investigations, while several senior executives either resigned or were terminated in the months following the strategy announcement.
The series of circular transactions in August, through which ALT5 Sigma accumulated $1.5 billion worth of WLFI tokens, have raised eyebrows, with estimates suggesting that over $500 million ultimately flowed to entities associated with President Trump. This has led to increased scrutiny of the company's dealings and its relationship with the Trump-affiliated crypto project.
Alt5 Sigma's recent actions have attracted attention from regulatory bodies and sparked concerns among investors. The investigation into potential SEC violations, coupled with the leadership changes and the controversial WLFI token deal, have created a cloud of uncertainty around the company's future.
