World Liberty Financial gets ‘D’ grade from new crypto risk rating firm

World Liberty Financial, the Trump family crypto project, is among the industry’s riskiest investments, according to a new ratings firm.

On Thursday, it received a D rating from CORE3, which aims to push DeFi protocols, centralised exchanges and crypto firms to shore up their security and increase transparency by assessing them on the probability that users could lose funds through them.

“The industry still suffers from all the same problems it had when I joined in 2017,” Dyma Budorin, CEO of HAI Group, the firm behind CORE3 and blockchain security firm Hacken, told DL News.

Many projects just want to make money fast and don’t think about the risks, Budorin said. “We need to put pressure on them.”

CORE3 officially launched on Thursday, and has assigned numerical risk ratings to 1,426 crypto projects and 253 exchanges based on publicly available data.

Lower scores indicate a lower probability of loss and correspond to A and B letter grades, while higher scores indicate more risk.

The projects CORE3 tracks can submit more information to change their risk scores. The firm will also reach out to projects itself to request more information, Budorin said.

Institutional interest

CORE3’s launch comes as more and more traditional finance firms look to invest in the crypto industry.

Many crypto firms who spoke with DL News during the EthCC conference in Cannes said those institutions need more risk profiling to feel comfortable investing.

It’s this need that CORE3 is attempting to fill.

To be sure, there are other crypto ratings agencies around, such as Credora and Metrika.

Some crypto projects, such as Sky, have previously paid to receive a debt rating from S&P Global Ratings, a leading credit rating agency in the traditional financial world.

Among the crypto-specific ratings firms, CORE3 advertises itself as the only one that makes its scoring system completely public, allowing anyone to see exactly why projects received the score they did.

“Maybe others will copy our methodology,” Budorin said. “That’s fine if we’re making the industry safer.”

WLFI’s score

World Liberty Financial’s 68.01 probability of loss score and corresponding D grade puts it among the bottom 50 worst scoring projects on CORE3. The worst scoring project currently is RealT, a fractionalised real estate investing platform.

Top risks at the $2.8 billion DeFi project include a lack of continuous onchain monitoring, which raises the chance of a delayed response should a security incident happen.

CORE3 also noted the lack of a structured bug bounty programme, which reduces proactive vulnerability discovery and raises the risk that attackers find issues first.

The project’s token structure, where insiders own the majority of tokens, is another major risk.

Budorin said he anticipates criticism over CORE3’s ratings system and requests feedback from the industry to help improve it.

“We are not the final word,” he said. “If a change to our methodology makes sense we will do it.”

World Liberty Financial didn’t immediately return a request for comment.

Update, April 2: A previous version of this article stated that World Liberty Financial received a 'DDD' grade, per the CORE3 website. CORE3 has clarified the grade should have been 'D.' The article has been updated to reflect this.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.