A claim has emerged that WLFI, a token issued by World Liberty Financial, a DeFi and stablecoin project linked to U.S. President Donald Trump’s family, could qualify as an unregistered security.

The Block reported on May 8 that Lee Reiners (리 라이너스), a Duke University instructor and former New York Federal Reserve examiner, said in a blog post that WLFI is likely to become a target of a U.S. Securities and Exchange Commission investigation.

Reiners said it is hard to see WLFI as a pure digital commodity, citing the SEC’s recent standards for classifying tokens. World Liberty has argued WLFI is a pure governance token, but Reiners viewed it as a token sold to raise funds for a centrally controlled crypto business.

World Liberty introduced WLFI in an October 2024 “gold paper” as a voting token for a lending protocol. It said there were no equity, dividend or profit rights and described it as a tool for decentralised governance. But World Liberty sold about 25 billion WLFI out of a total 100 billion through multiple public presales.

Reiners said the sales method was likely to have created expectations of profit among investors. The Block reported that this is a key factor in the Howey Test that the SEC uses to determine whether an asset is a security.

WLFI was sold before the protocol was built and was marketed using the Trump family name, it added.