The crypto treasury sector may be claiming another victim after ALT5 Sigma, a company tied to Trump-backed World Liberty Financial, flagged mounting operational losses and raised doubts about its ability to continue as a going concern.
Trump-Tied AI Financial Warns of Going Concern Risk Due to WLFI Plunge
20 May 2026 - 00:35 CEST
By Jona Jaupi
ALT5 Sigma, which recently rebranded as AI Financial Corp., had just $10.5mn in cash at the end of the quarter and a $5.5mn funding gap, according to a recent filing with the US Securities and Exchange Commission (SEC).
The company reported a net loss from continuing operations of $271.3mn for the quarter ended 28 March while holding 7.28bn WLFI tokens – the governance token of World Liberty Financial. The stake was valued at $703mn at quarter-end but is worth roughly $437mn as of 19 May based on WLFI's market price of about $0.06 at 20:52UTC. The holdings are now valued far below the position's $1.46bn acquisition cost from Aug 2025.
According to CoinGecko, WLFI is down 58% year-to-date.
The filing highlights a risk facing some digital asset treasury strategies. Large token holdings can strengthen a balance sheet on paper, but their practical utility may depend on liquidity and the ability to convert assets into cash when needed.
In ALT5's case, access to its WLFI holdings is constrained by lock-up provisions. Some tokens cannot be transferred for at least 12 months, while others remain subject to additional conditions before becoming eligible for sale.
Trump Family Ties
ALT5 Sigma's ties to World Liberty Financial go beyond its WLFI token holdings. World Liberty Financial is the Trump-backed crypto project that launched in 2024 with support from members of the first family, including US President Donald Trump and his sons.
The two companies also share board members: Zac Witkoff, World Liberty Financial's CEO and co-founder, serves as chairman of ALT5 Sigma, while Zachary Folkman remains on the company's board. World Liberty also holds a large equity position in the company through shares and warrants, according to the filing.
Eric Trump, once listed as an adviser and board observer at ALT5, was removed from the company's leadership page in recent months without explanation, Bloomberg reported.
Rise and cooling
ALT5's troubles also come as excitement around crypto treasuries has started to cool after a rapid rise over the past few years. The model expanded quickly as public companies increasingly began adding crypto assets to their balance sheets.
According to CoinGecko, the number of companies holding digital assets grew from just four in 2020 to 142 by late 2025, with more than half of those launches occurring in 2025 alone. These companies spent at least $42.7bn acquiring crypto in 2025.
Many companies saw their shares surge shortly after announcing treasury strategies, but those gains quickly faded as crypto markets retraced. ALT5 shares fell 71% within 44 days of shifting toward a WLFI treasury strategy, while the value of its WLFI holdings has dropped about 70% from its acquisition level.
Bitcoin (BTC) treasury companies still dominate the market, accounting for more than 80% of crypto holdings by value, while treasury strategies involving other tokens remain a much smaller part of the sector, CoinGecko data shows.
