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- Dough Finance lost $2.5 million in a cyberattack due to a platform flaw.
- The founders promised to refund users but later launched a new crypto venture.
- A former user is suing for fraud after losing his investment.
Dough Finance, once a fast-rising crypto trading platform, collapsed after a major hacking incident in July 2024. The platform allowed users to borrow against crypto holdings in a process called “looping.” This risky feature attracted attention, especially from investors like Jonathan Lopez.
He invested $1 million, spurred by the design of the platform and its creators that facilitated high-leverage trading as easily as possible. Dough’s design revolved around fast trades and an elegant user interface. Other users perceived it as an easier, safer way into high-stakes crypto maneuvers.
That confidence was lost, however, when hackers took advantage of a vulnerability in the code. In a single blow, $2.5 million was lost in the system. A mere $281,000 was recovered despite assurances of reimbursement by the founders. The platform subsequently went down shortly thereafter.
Trump-Backed Crypto Venture Sparks Controversy
The Dough co-founders, Chase Herro and Zak Folkman, became inaccessible to users following the hack. Investors spent weeks waiting for word or their money back. Herro and Folkman reemerged two months later, however, with World Liberty Financial, another project. The rollout featured A-list partners: former President Donald Trump and his sons, Don Jr., Eric, and Barron.
The abrupt change caught many users of Dough by surprise. Others perceived that the venture was a betrayal. The creators had promised to restore trust but jumped to an even more profitable venture. At least $65 million was reportedly raised by World Liberty Financial. Existing users of Dough were left behind and felt left in the lurch.
The new company positioned itself as becoming one of the leading players in decentralized finance. Visible roles were played by members of the Trump family, who were assigned names such as “Chief Crypto Advocate” and “Web3 Ambassador.” The quick success of the new company was in stark contrast to Dough’s silence and losses.
Crypto Investor Takes Legal Action in Florida
One of Herro’s most impacted users, Jonathan Lopez, is pursuing legal recourse. He brought a lawsuit in Florida, suing Herro for fraud, misrepresentation, and fiduciary duty breach. Lopez claims that he was misled and strongly encouraged to invest heavily based on false promises.
Herro’s attorneys have contended that Lopez, being an experienced investor, was well aware of the risks. They urge dismissal or arbitration. But Miami’s federal court has scheduled a trial for April 2026. The case could potentially create significant precedent for cryptocurrency investment disputes.
The repercussions of World Liberty’s increasing growth still linger on Dough Finance. Former users feel that even yet, justice has not yet been done, and that they want to make accountable those persons who vowed to protect their money.
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