Investor Jonathan Lopez has filed a lawsuit against Chase Herro, the head of data and strategy at World Liberty Financial (WLF), accusing him of fraud and breach of fiduciary duty. This was reported by Reuters.
The allegations pertain to Herro’s role as co-founder of the DeFi platform Dough Finance. His partner, Zachary Folkman, who later became the chief operating officer at WLF, is not mentioned in the lawsuit.
On July 12, 2024, Dough Finance suffered an attack involving flash loans. Losses amounted to $3.1 million, which the executives promised to reimburse. A post on Medium noted that by July 24, efforts by cybersecurity firm SEAL 911 had recovered 76.2 ETH.
Project representatives promised that “each affected user will receive a portion of the recovered funds proportional to their losses,” with the remainder to be covered by Dough tokens.
“As we continue our efforts to recover more funds, users will have the opportunity to burn their Dough tokens in exchange for additional recovered ETH,” the post stated.
According to court documents, Herro assured Lopez in correspondence that he would be compensated approximately 300 ETH. However, after August 18, the Telegram chat and Dough’s X account ceased updates. Journalists, citing CertiK, noted that in September, the project sent $180,000 in ETH to 134 addresses. Several users interviewed by the agency, under anonymity, reported not receiving payments.
In early September, media revealed details of a DeFi project by the sons of U.S. President Donald Trump. It turned out that the WLF white paper describes a lending service “strikingly” similar to Dough Finance. The document also listed Herro and Folkman.
Lopez accused Herro of fraud, deception, breach of fiduciary duty, and violation of Florida securities laws. The plaintiff demanded compensation for damages and punitive sanctions, as well as payment of legal costs.
According to media reports, Herro’s lawyers described Lopez as a “sophisticated” investor who should have understood the risky nature of cryptocurrencies. They filed a motion to dismiss the case or move it to arbitration. The hearing is scheduled for April 2026.
Senator Richard Blumenthal initiated an investigation into Trump’s crypto connections, demanding disclosure of financial flows and ownership structures of his projects.
Earlier, 20 Democratic Party senators introduced a bill prohibiting the president, vice president, members of Congress, and their families from issuing or promoting cryptocurrencies.