Eric Trump will no longer be joining the board of fintech firm Alt5 Sigma, a move that came just weeks after the Trump Organisation-backed crypto deal was announced. Instead, he has been relegated to a board observer role. The change followed consultation with the Nasdaq Stock Market, according to an SEC filing, though neither Nasdaq nor Alt5 Sigma provided clarity on the exact rule prompting the adjustment. Initially positioned as a significant step in expanding the Trump family’s involvement in cryptocurrency, the board reshuffle raises questions over governance and compliance.

Compliance Over Clarity

The SEC filing stated that the change was made “after discussion with The Nasdaq Stock Market LLC (‘Nasdaq’) and to comply with Nasdaq’s listing rules.” However, it did not specify which rule Eric Trump’s appointment would have violated. Securities law experts, asked by Forbes to review the filings, could not identify a clear reason why Nasdaq would reject Trump’s appointment but allow another nominee, Zak Folkman, to join instead.

Nasdaq requires that listed companies maintain a majority of independent board members. If Trump’s involvement was seen as non-independent, it remains unclear why Folkman would qualify differently. Importantly, Eric Trump’s legal restrictions in New York, where he is barred from serving as an officer of a New York corporation, do not appear relevant here, as Alt5 Sigma is incorporated in Nevada.

The Rise of World Liberty Financial

World Liberty Financial (WLF), the entity behind the crypto venture, launched in September 2024. Branding itself as a decentralised finance platform “inspired by the vision of Donald J. Trump,” it began selling its $WLFI tokens a month later. Initially priced at $0.015 for early investors and later $0.05, the tokens do not provide ownership stakes or asset backing. Instead, they grant holders the ability to vote on changes to the platform’s rules.

By July, token holders voted to permit early investors to sell a portion of their holdings. However, founders including members of the Trump family remain restricted from selling. As of September 8, 2025, the token was trading at $0.2092, giving early investors a healthy return, though prices are still down around 30% from their peak.

Alt5 Sigma’s Billion-Dollar Stake

One of the most significant developments in the deal is Alt5 Sigma’s acquisition of 7.3 billion $WLFI tokens at $0.18 each. Based on current trading prices, that stake is now worth approximately $1.5 billion, an appreciation of around $210 million in less than a month. The valuation highlights both the potential and volatility of crypto-driven ventures, especially when tied to high-profile backers such as the Trump family.

The SEC filing also revealed that Zachary Witkoff has been appointed as chairman of the board, serving as the initial nominee selected by WLF. Meanwhile, both Eric Trump and Zak Folkman have been designated as observers. Subject to shareholder approval, Folkman is expected to transition from observer to full board member.

Complications Beyond Trump

The SEC filing that disclosed Eric Trump’s downgrade also revealed other serious legal challenges facing Alt5 Sigma. A Rwandan court recently found its Canadian subsidiary and former principal, Andre Beauchesne, guilty of illicit enrichment and money laundering. The court ordered the dissolution of the subsidiary, sentenced Beauchesne to prison, and seized $3.5 million. Alt5 Sigma has appealed, claiming fraud and stating that its board only learned of the ruling in late August.

In addition, Alt5 Sigma faces a summons tied to a bankruptcy case involving its former CFO, Virland Johnson. The complaint alleges Johnson failed to disclose restricted stock units worth 330,000 shares during his January 2024 bankruptcy filing. U.S. trustees are seeking to reclaim the shares or their equivalent value, though Alt5 Sigma disputes the allegations.

The Bigger Picture

The Trump family’s deepening ties to cryptocurrency have played a significant role in boosting their fortunes. Donald Trump’s net worth has surged to an estimated $7.3 billion, up from $4.3 billion in 2024, largely due to crypto-related gains and financial benefits linked to his return to the presidency. This $3 billion increase has placed him at No. 201 on the Forbes 400 list, marking his highest-ever position.

For Eric Trump, however, the shift from prospective board director to observer represents both a reputational setback and a reminder of the regulatory complexities in the crypto-financial world. With Alt5 Sigma navigating billion-dollar token holdings, governance reshuffles and international legal troubles, the firm and its Trump-linked partners remain under close scrutiny as the crypto sector continues to evolve.