AIFC is sitting on 7.28 billion WLFI tokens valued at roughly $706 million at current market prices, yet none of that value is available to shore up liquidity. A filing with the U.S. Securities and Exchange Commission says that, as of March 28, the entire WLFI position was contractually locked and could not be sold.
Locked token holdings leave a large asset effectively unusable
The company, which previously operated as Alt5 Sigma, rebranded in April and shifted its focus toward fintech services tied to crypto payment processing. Its WLFI holdings were originally acquired at an estimated cost of about $1.46 billion, far above their current marked value. The bigger issue is access. Of the total, 3.53 billion tokens are subject to a 12-month transfer restriction, while the other 3.75 billion cannot be accessed or sold without shareholder approval, bylaw amendments, and resale registration.
That leaves AIFC with a large reported crypto asset and little immediate flexibility. Its fintech business generated only $4.7 million in first-quarter revenue.
Cash balance and loan terms sharpen the liquidity strain
AIFC finished the quarter with just $10.5 million in cash and a $5.5 million working capital deficit. The company is still posting losses from operations, and under U.S. reporting rules it said there is significant doubt about its ability to continue over the next 12 months.
The filing links that risk directly to the illiquid status of its largest asset. A separate pressure point comes from a $15 million loan secured by the WLFI holdings. If AIFC fails to repay that debt, all of its WLFI tokens would transfer to WLFI as collateral recovery.
Shared executives and ownership links add governance questions
The relationship between AIFC and World Liberty Financial extends well beyond the token position. Zac Witkoff serves as chair of AIFC’s board and is also WLFI’s CEO and co-founder. AIFC board member Zachary Folkman is another WLFI co-founder. WLFI also owns 1 million common shares in AIFC, 99 million pre-funded preferred shares, and options for another 20 million shares, a structure that could give it control of as much as 46% of AIFC’s equity.
Those overlaps place more attention on whether governance decisions, financing arrangements, and treasury oversight are sufficiently independent.
Internal control weaknesses and custody gaps remain unresolved
The filing also flagged major weaknesses in AIFC’s internal controls. These included gaps in documentation for control procedures, misvaluations tied to company mergers, and accounting errors that made its 2024 financial statements inaccurate and in need of restatement.
Oversight of the WLFI token treasury also remains unsettled. Crypto exchange Kraken briefly acted as custodian last year, then stepped down after only 30 days without renewal, and no replacement has been named since. Investor concern showed up in the stock. On Monday, AIFC shares on the New York exchange fell 9.6% to close at $0.91.