Original Author: Zhao Ying
Original Source: Wall Street News
Alt5 Sigma, associated with Trump's cryptocurrency assets, is facing chaotic financial reporting and potential delisting risks, having changed three audit firms within six weeks, while company executives have also resigned recently.
On Tuesday, according to a report by the Financial Times, the cryptocurrency company Alt5 Sigma, linked to the Trump family, hired the audit firm Victor Mokuolu CPA PLLC earlier this month, but its license expired in August. After the Financial Times inquired about this issue, Alt5 Sigma dismissed the audit firm on Christmas Day and appointed LJ Soldinger Associates as its third audit institution.
The Las Vegas-based company reached a deal with the Trump family's World Liberty Financial in August, agreeing to purchase and hold a large number of $WLFI tokens, after which Eric Trump joined the board as an observer. However, since the announcement of the deal, the company has failed to release its quarterly financial reports on time, facing the threat of delisting from Nasdaq.
Alt5 Sigma's chaos is not only reflected in the frequent change of auditors but also in the recent resignation of executives, including Chief Financial Officer Jonathan Hugh, who joined during the Trump deal but left three months later, and CEO Peter Tassiopoulos, who resigned in October.
Expired Auditor License Causes Chain of Problems
The dismissed audit firm, Victor Mokuolu CPA PLLC, had its license expire in Texas in August. According to state regulations, the firm was prohibited from conducting audit work before the license was renewed. Although the founder, Victor Mokuolu, renewed his personal CPA license on August 31, as of December 26, the firm's license had not been renewed by the Texas State Board of Public Accountancy (TSBPA).
The audit firm had previously faced regulatory penalties for repeatedly failing to submit regulatory documents on time. The Public Company Accounting Oversight Board (PCAOB) fined the firm $30,000 in 2023 for failing to notify regulators within the required 35 days of completing audit work for six listed companies. Texas regulators imposed an additional $15,000 fine last year for the same violation.
The audit firm received a failing grade in the 2023 accounting industry peer review and has been working to correct related deficiencies for over two years. According to recent regulatory filings, the firm listed 30 small-cap audit clients.
Turmoil After the Trump Deal
During the period from December 8, when Alt5 Sigma appointed and subsequently dismissed Victor Mokuolu CPA PLLC, the company was in a state of intense turmoil. The company currently defines itself as "a fintech company with a groundbreaking $WLFI digital asset treasury strategy."
The Trump deal in August promised that the company would purchase and hold a large number of WLFI tokens from World Liberty Financial, and Trump's cryptocurrency project also became an investor in Alt5 Sigma. As of December 8, Alt5 Sigma held approximately 73 billion WLFI tokens, worth about $1.1 billion, and Trump's cryptocurrency project also became an investor in Alt5 Sigma.
Since the Trump deal, the chairman of Alt5 Sigma has been Zack Witkoff, the co-founder of World Liberty Financial and the son of Steve Witkoff, Trump's peace negotiation special envoy.
The company's top management has undergone significant changes in recent months. Chief Financial Officer Jonathan Hugh, who joined during the Trump deal, resigned three months later, and CEO Peter Tassiopoulos left in October. Board member David Danziger resigned last month, causing the company to violate requirements regarding the size of the audit committee and accounting professional experience.
Delayed Financial Reports and Delisting Threat
Alt5 Sigma faces the threat of delisting from Nasdaq due to its failure to submit its quarterly financial report for the period ending September on time. The company partially attributed the delay to the "timeliness and responsiveness" of the former auditor, who officially resigned in November.
Alt5 Sigma was restructured from the biotechnology company JanOne in July 2024, which previously focused on developing "innovative solutions to end the opioid epidemic." JanOne merged with Alt5 Sigma and was renamed in the same month. JanOne had previously changed its name in September 2019, and before that, the company was called Appliance Recycling Centers of America.
Alt5 Sigma stated that it provides financial infrastructure to enable traditional financial institutions to integrate with the digital asset economy.
In August of this year, Alt5 Sigma disclosed to U.S. regulators that its Canadian subsidiary and the group's former head were convicted in May by a Rwandan court of "crimes including illegal enrichment and money laundering." Alt5 Sigma Canada and Andre Beauchesne appealed to the High Court of Kigali, Rwanda, in June, and the case is still under judicial review. Alt5 Sigma Canada and Beauchesne both deny any wrongdoing and insist they are victims of fraud.
