Trump's crypto assets show frequent "danger signals," Alt5 Sigma falls into a management black hole

Issues related to the cryptocurrency company Alt5 Sigma, associated with the Trump family, are rapidly coming to light. Within just six weeks, the company has changed auditors three times, coupled with a wave of collective resignations among senior management. Once positioned as a “fintech innovator,” the company is now facing strict scrutiny from regulatory authorities overseeing its listing.

The Truth Behind Frequent Auditor Changes

The trigger for the problem was the expiration of the license of the hired auditing firm Victor Mokuolu CPA PLLC in Texas in August. According to local regulations, during the license expiration period, companies are prohibited from engaging in audit activities. Although founder Victor Mokuolu personally renewed his license on August 31, as of December 26, the company-level license had not yet been renewed by the Texas State Board of Public Accountancy (TSBPA). This means Alt5 Sigma was effectively employing an “unlicensed” auditing firm.

Following inquiries from the Financial Times in the UK, Alt5 Sigma urgently dismissed Victor Mokuolu CPA PLLC on Christmas Day and appointed LJ Soldinger Associates as the new auditor. This marks the third auditor change within six months for the company.

The regulatory history of this problematic auditing firm is also poor. The Public Company Accounting Oversight Board (PCAOB) in the US fined it $30,000 in 2023 for failing to report the completion of audits for six publicly listed companies within 35 days. Texas subsequently imposed an additional $15,000 fine. The firm also received a failing grade in industry peer reviews and has been attempting to correct related deficiencies for years.

Management Turmoil and Corporate Governance Crisis

Rapid changes in management have heightened market concerns about the company’s stability. After reaching a WLFI token holding agreement with the Trump team, Jonathan Hugh, the new CFO, resigned just three months into his role. CEO Peter Tassiopoulos also announced his departure in October. Board member David Danziger resigned last month, leading to violations of minimum requirements for the number of audit committee members and accounting professional backgrounds.

The chairman position is held by Zack Witkoff, co-founder of World Liberty Financial and son of Trump peace negotiation envoy Steve Witkoff. These frequent top-level changes have seriously questioned the company’s operational capacity.

WLFI Holdings and Delisting Risks

According to the latest data, Alt5 Sigma held approximately 7.3 billion WLFI tokens as of December 8. At the current price of $0.17 per WLFI, this asset is worth about $1.1 billion, with a circulating market cap of $4.14 billion. This massive token holding has become a core part of the company’s assets and also carries a key connection to the Trump ecosystem.

However, the company has received a delisting warning from NASDAQ due to its failure to timely file quarterly reports for the end of September. The company attributes the delay to the “insufficient timeliness and responsiveness” of its former auditor, who officially resigned in November. The delay in financial reporting and auditor changes have created a vicious cycle, increasing the risk of triggering mandatory delisting provisions.

Identity Changes and Legal Risks

Alt5 Sigma’s current identity was restructured from biotech company JanOne in July 2024. JanOne was originally focused on “solutions to the opioid crisis” but later pivoted into the crypto asset space. This rapid shift in business focus itself warrants market caution.

More concerning is that in August this year, Alt5 Sigma disclosed to US regulators that its Canadian subsidiary and former executive Andre Beauchesne had been implicated in “illegal wealth accumulation and money laundering” by a Rwandan court in May. Andre Beauchesne and Alt5 Sigma Canada have appealed to the High Court in Kigali, Rwanda, and the case is still under judicial review. Both parties deny misconduct, claiming to be victims of fraud. This international legal dispute adds new uncertainty to an already turbulent company.

Post-Transformation Dilemmas

The company positions itself as a “fintech enterprise with pioneering WLFI digital asset management strategies,” claiming to provide financial infrastructure services to help traditional financial institutions access the digital asset economy. However, in reality, the company’s financial reports are chaotic, its audit mechanisms have collapsed, and management is unstable. These issues point to a deeper problem: after rapidly entering the crypto asset track, the company has yet to establish operational and compliance systems that match its ambitions.

What is missing is not just auditors, but also a commitment to compliant operations.