Trump crypto guru is self-described ‘dirtbag of the internet’

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Chase Herro has sold a lot of things in his career. Weed. Weight-loss “colon cleanses.” A US$149-a-month get-rich-quick class. Now he’s adding another line to his resume: the Trump family’s crypto guru.

Herro is the dealmaker behind World Liberty Financial, the crypto project that Donald Trump and his two older sons have been promoting on social media in recent weeks, according to two people involved with the project. Herro’s long-time business partner Zachary Folkman is also playing a key role. While few details about World Liberty have been released, Eric Trump said that the startup will promote “financial independence” and Donald Trump Jr. said it will “make finance great again.” Former President Trump himself posted a video saying he’d announce the details on Sept. 16. “We’re embracing the future with crypto and leaving the slow and outdated big banks behind,” Trump said.

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Yet Herro, a fast-talking 39-year-old who shows off his fancy cars and private-jet rides on social media, is an unknown in the crypto world. More than a dozen prominent digital-asset investors said in interviews they had never heard of him. The only crypto project with which he was publicly affiliated attracted only a few million dollars and suffered a devastating hack. A token he promoted on influencer Logan Paul’s podcast dropped 96 per cent afterward. In one speech in 2018, he called himself “the dirtbag of the internet” and said that regulators should “kick s—heads like me out.”

“You can literally sell s– in a can, wrapped in piss, covered in human skin, for a billion dollars if the story’s right, because people will buy it,” Herro said about crypto in a 2018 YouTube video recorded as he drove in a Rolls-Royce. “I’m not going to question the right and wrong of all that.”

Bloomberg News sent detailed questions to a World Liberty email address. “We all see the picture you’re trying to paint here and consider it at best grossly inaccurate,” a man named Jim Redner replied. “We’re confident that our results will speak for themselves.” Redner said he was not a spokesperson for the company and was “just answering emails.” Herro, Folkman and the Trump presidential campaign didn’t respond to messages seeking comment.

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Herro was introduced to the Trumps by Steve Witkoff, a real-estate developer and longtime supporter of the former president, after first meeting one of Witkoff’s sons, according to one of the people involved with the project.

‘Make finance great again’

When they met, Trump was reconsidering his stance on crypto. He’d once called Bitcoin a “scam against the dollar,” but in late 2022 he licensed his image for a series of nonfungible tokens – essentially, digital trading cards – featuring cartoon images of a muscular Trump. Then in July, after Bitcoin advocates raised what they said was US$25 million for his campaign, Trump flew to Nashville to speak at a Bitcoin conference, where he promised to loosen regulations on the industry and create a strategic national stockpile of the cryptocurrency.

“The United States will be the crypto capital of the planet,” Trump said in the speech.

At the same time, Trump’s sons were getting curious about the industry. At the Nashville conference, Donald Trump Jr. appeared at an event sponsored by a little-known token called “Make America Great Again, Again,” though he said he had no affiliation with the project. And in June, Martin Shkreli, the former hedge-fund manager who served years in prison for securities fraud, said that he’d been talking with Barron Trump about starting another Trump cryptocurrency. Shkreli declined to comment.

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Herro, who usually spells his name as “Chase Hero” with one “r” online, seemed like a better partner. He was affiliated with Dough Finance, a so-called decentralized-finance protocol which promised to allow users to borrow and lend crypto without intermediaries.

The two people involved with World Liberty insisted that Herro is a billionaire with a track record of crypto success. But Dough Finance only attracted US$3.2 million in total activity, a tiny amount for the crypto industry, according to data provider DefiLlama. In July, it was hacked for about US$2 million and it appears to be inactive now. An email to Dough Finance seeking comment was not returned.

Crypto platform

Like Dough, World Liberty is being pitched as a platform for borrowing and lending crypto. It will have its own token, called WLFI, which it says will allow users to vote on how the project is run, according to a white paper reviewed by Bloomberg News. About 70 per cent of those tokens will be reserved for insiders, with the rest sold to the public to raise cash. That amount of tokens going to insiders is “quite high” for a project that in theory is supposed to be decentralized, said Leo Mizuhara, founder of crypto asset manager Hashnote. Usually no entity or group of investors owns more than 20 per cent of a project’s total token supply, he added.

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While the World Liberty plan might sound innovative to someone unfamiliar with crypto, startups like this are common, and few succeed. Many of them are only created in order to sell tokens and make money, said Tarun Chitra, general partner at Robot Ventures, which in August raised a US$75 million fund to invest in new crypto projects.

“This just feels like a fly-by-night, trying to make a quick buck, kind of thing,” Chitra said of World Liberty. “It really doesn’t seem earnest to me.”

Red flags

Herro’s involvement isn’t the only red flag when it comes to World Liberty. The white paper lists 18-year-old Barron Trump – a college freshman with no known crypto expertise — as “chief DeFi visionary.” A JPMorgan Chase banker listed as an adviser to the project, Brian Baker, refused to say whether that description was accurate.

Herro is described in the white paper as the person responsible for “data & strategies.” His friend Folkman is listed as “operations lead.” Folkman used to run a service called Date Hotter Girls where he taught seminars about how to pick up women. “OK, how many guys came here to learn how to take girls home and bang them?” Folkman said in a speech in 2014. The trademark for World Liberty is registered to a company using the same address in Puerto Rico as another company run by Herro and Folkman.

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Herro likes to tell the story of how he spent time in prison for dealing marijuana when he was a young man before getting rich through internet marketing in the early days of social media. He was involved in what’s known as “affiliate marketing,” in which middlemen buy ad space on social networks and use it to sell products for other companies, which pay a bounty.

“You could just make millions,” Herro said in a video. “It was the easiest thing in the world.”

Herro’s marketing business left only a few traces online. But in a lawsuit he filed in 2014, he said that he marketed a “colon cleanser” called Regula RX on Facebook and wasn’t paid for the sales he generated. Carl Ruderman, owner of Regula RX, didn’t immediately respond to a letter sent to him at a federal prison in Miami, where he’s serving a five-year sentence for an unrelated Ponzi scheme.

Herro said in another video that he had at times employed a tactic called “cloaking,” which means hiding ads’ contents to evade social networks’ rules. In another lawsuit he filed in 2014, he sought a refund from a middleman who had sold him 20 Facebook accounts from Singapore for US$100,000. Both tactics were the types of strategies used by advertisers who tried to place deceptive ads against social-media networks’ rules, according to Rob Leathern, a former Facebook executive who had responsibility for enforcing rules around advertising. “There’s no legitimate use case for cloaking,” said Leathern. (Leathern said he’d never heard of Herro.)

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Herro said in his videos that the online advertising business became more challenging once competition emerged. In recent years, he and Folkman have pivoted to crypto, running a membership group called the Watchers that claimed to teach people the secrets of crypto trading and making money online. The group had more than 250 members who paid at least US$149 a month, according to two people formerly involved with the group. Some paid tens of thousands of dollars for personalized coaching. Herro also appeared at other paid seminars with Jordan Belfort, whose penny-stock scams inspired the movie The Wolf of Wall Street.

“If you do this right, who f–ing cares if it goes to zero?” Herro said in a YouTube video promoting the Watchers. “You’ll make so much money trading these f—-ing coins in and out.”

‘Chief crypto advocate’

In 2021, Herro appeared on influencer Logan Paul’s podcast, Impaulsive. (Trump went on the same podcast in June.) During the podcast, Paul acted like he was surprised when Herro said he liked a cryptocurrency called OMI, which Paul said he liked too. A co-host asked if the two had planned the promotion before the show, and Herro denied it, swearing “on my kids.” The price of OMI has since declined 96 per cent. And a leaked video released by the scam-busting YouTuber Coffeezilla shows Herro and Paul talking with someone about getting more OMI tokens ahead of the show. A lawyer for Paul didn’t respond to a message seeking comment.

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The white paper for World Liberty lists Donald Trump as “chief crypto advocate” and his sons Eric and Donald Jr. each as “Web3 Ambassador.”  A disclaimer says that World Liberty is “not owned, managed, operated or sold” by the Trumps. It does note, however, that they may receive compensation. CoinDesk first reported on the white paper last week.

Promoting a private business like this while running for president is not illegal, though it’s a clear conflict of interest that may lead Trump to push crypto policies that favor his company, according to Danielle Brian, president of the Project On Government Oversight.

“The biggest harm is public policy is skewed away from what benefits the country to what benefits the individual and their family,” Brian said.

Whether or not the World Liberty project achieves its goals, its token might still be valuable. Trump’s fans have shown they’ll make investments in his companies even if they aren’t successful. In 2021, two former cast members from his reality show The Apprentice pitched Trump on starting his own social network, according to Reuters. The company that grew from that pitch, Trump Media & Technology Group Corp., which operates Truth Social, is worth about US$3 billion, despite quarterly revenue of less than US$1 million. Trump owns the majority of its stock.

When Trump considers an endorsement deal, his main consideration is not whether the product is useful, but whether he’ll receive cash up front, according to Michael Cohen, who served as the former president’s personal lawyer for years before testifying against him at his fraud trial.

“Is there upfront money attached?” Cohen said in an interview. “If the economics of the deal are to his benefit, with zero risk, he’s all in.”

— With assistance from Max Abelson

Bloomberg.com 

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