Eric Trump will no longer be joining the board of directors at Alt5 Sigma, a fintech firm managing a $1.5 billion WLFI treasury. This decision follows consultations with Nasdaq regarding compliance with its listing rules. Initially, Alt5 Sigma announced that Eric Trump would become a director, while World Liberty Financial (WLFI) co-founder Zak Folkman would be a board observer. However, the plan has been reversed, with Folkman now expected to take a directorship role, pending shareholder approval. Eric Trump will now serve as a board observer.
The change in leadership plans was disclosed in a Securities and Exchange Commission (SEC) filing. While the filing indicated that the adjustment was made after discussions with Nasdaq to ensure compliance with listing requirements, it did not specify which Nasdaq rule influenced the decision. This lack of clarity has raised questions, with legal experts unable to pinpoint a definitive reason for Nasdaq's intervention.
Alt5 Sigma's website continues to list Eric Trump as a director on its leadership and investor relations pages, despite the SEC filing stating his role as a board observer.
The company recently announced a $1.5 billion treasury deal with WLFI, involving Alt5 Sigma's acquisition of 7.3 billion $WLFI tokens. In August, Alt5 Sigma announced it would raise $1.5 billion through direct and private sales of its shares and use the proceeds to buy digital tokens from World Liberty Financial. As part of the deal, Eric Trump was to become a director, and Zak Folkman would join as a board observer.
The SEC filing also revealed that a Rwandan court found Alt5 Sigma's Canadian subsidiary and its former principal, Andre Beauchesne, criminally liable for illicit enrichment and money laundering. The court dissolved the subsidiary, sentenced Beauchesne to prison, and ordered the seizure of $3.5 million. Alt5 Sigma stated that its current board only became aware of the legal ruling in late August. The company and Beauchesne have appealed, claiming they were victims of fraud.
Shares of the crypto firm slipped nearly 4% during afternoon trade on Tuesday. Earlier in the month, Alt5 Sigma offloaded shares and raised $750M in cash from outside investors to acquire World Liberty Financial's WLFI cryptocurrency. Last month, ALT5 Sigma announced that it would raise $1.5 billion, by selling 200 million shares at $7.50, to acquire more $WLFI tokens, set up a cryptocurrency treasury, settle litigation, pay debt, support operations, and for general corporate purposes.
