Two co-founders of World Liberty Financial (WLFI), Chase Herro and Zak Folkman, have been accused of abandoning their investors from a previous DeFi project, Dough Finance, which suffered a flash loan exploit in July 2024 that led to losses of approximately $2.5 million in USDC and Ethereum (ETH). Dough Finance was an open-source non-custodial liquidity market protocol co-founded by Herro and Folkman. After the hack, the team managed to recover about 76.2 ETH (worth roughly $281,000), with around $180,000 distributed to select addresses, but many investors have reported not receiving reimbursements.
Despite promises of making affected users whole and a governance vote passing with 99.5% support to reimburse token holders, no meaningful compensation has been given since September 2024. Following the collapse of Dough Finance, Herro and Folkman launched a new project, WLFI, alongside former US President Donald Trump and his sons. WLFI reportedly has generated over $550 million in token sales, from which Herro and Folkman have earned at least $65 million in revenues.
Investigations and reports highlight that Dough Finance's website is shut down and the protocol's TVL is minimal ($1,689), while the co-founders ceased communication on official channels after mid-August 2024. Additionally, Chase Herro faces a lawsuit filed by a Dough investor in Florida for alleged fraud, misrepresentation, breach of financial duties, and securities law violations. The lawsuit centers on Herro's failure to reimburse investors who lost significant ETH amounts in the hack. The trial is scheduled for April 2026.
Despite the controversies surrounding the WLFI founders, none of the Trump family members involved in the WLFI project have any connection to the Dough Finance breach or alleged investor abandonment. WLFI has recently invested $3 million in EOS tokens, presenting a stark contrast to the unresolved reimbursement to Dough investors.