Eric Trump has been removed from the leadership page of Alt5 Sigma Corp., a crypto firm closely tied to the Trump family’s World Liberty Financial Inc., according to recent website updates. The change occurred within the past week, with no formal explanation from the company. This has fueled allegations of an “exit scam” by Mike Dudas, founder of crypto media outlet The Block, who accused Eric Trump of orchestrating an “unpresidented” exit scam—meaning he allegedly used his influence to attract investment and then withdrew his association.
Alt5 Sigma, now operating as AI Financial under NASDAQ: ALTS, had previously listed Eric Trump as an adviser and board observer. Earlier plans had positioned him as a board director alongside Zachary Witkoff and Zak Folkman, but those plans shifted, and he accepted a non-voting observer role. Despite the removal of Eric Trump, Witkoff and Folkman remain listed as active board members.
The company reported a net loss exceeding $341 million in its latest fiscal year and warned investors about doubts regarding its ability to continue operations. Alt5 Sigma entered the Trump crypto ecosystem after agreeing to hold World Liberty tokens and committing to build a $1.5 billion crypto reserve in exchange for equity and board positions.
World Liberty Financial is currently facing a lawsuit from crypto entrepreneur Justin Sun, who accused the company of extortion and unlawful freezing of digital assets. Eric Trump dismissed the lawsuit as “ridiculous” on social platform X, but the dispute has added to scrutiny around Trump-linked crypto projects. Token performance has weakened across related projects, including the $TRUMP token, and shares tied to a connected Bitcoin mining firm have declined.
Alt5 Sigma also disclosed plans to acquire Block Street, a crypto infrastructure startup linked to adviser Morgan, in a deal that could reach $43 million based on performance terms. Morgan denied claims of self-dealing, stating the startup had no revenue and was previously offered to other public companies.
Separately, World Liberty’s connection to AB, a crypto venture, raised compliance questions following U.S. sanctions targeting networks linked to alleged fraud operations. The Justice Department and Treasury have sanctioned over 140 individuals and entities tied to “pig butchering” scams operating out of Cambodia. A lawyer for World Liberty denied any connection to sanctioned individuals, clarifying that the AB arrangement was a “limited non-exclusive technology integration” involving the USD1 stablecoin.
Mike Dudas’ public accusation has intensified debate about transparency in celebrity-endorsed crypto projects. Legal and regulatory scrutiny from the SEC could follow if the exit scam allegations are proven, potentially involving securities fraud.
