Cryptocurrency firm ALT5 Sigma has denied reports that the Securities and Exchange Commission is investigating the company. The rumors circulated after reports tied the firm to a recent $1.5 billion deal with the World Liberty Financial, a company with ties to the current president.
Just days after announcing a $1.5 billion agreement with Donald Trump’s World Liberty Financial (WLF), ALT5 Sigma has denied reports that the firm and one of its executives are involved in a new U.S. Securities and Exchange Commission (SEC) investigation.
There was speculation on Tuesday that venture capitalist Jon Isaac was under investigation for alleged insider share sales and earnings falsification associated with ALT5’s treasury financing for WLF.
The claims, which were initially reported by The Information, were promptly disseminated across financial media and social platforms.
ALT5 Denies Links to Exec in Reported SEC Probe
Isaac was never the president or adviser of ALT5, and the company denied any knowledge of any ongoing SEC investigation into its activities. ALT5 responded to X within hours.
Isaac also released his statement on X, stating that the reports “contain significant factual errors regarding my role and current regulatory status.”
The denial did not significantly stabilize the market reaction. On Tuesday, ALT5 (ALTS) shares declined by 10.5% to $10.48 and continued to decline in after-hours trading, settling at $5.39. This loss erased the company’s gains since August 12, when it disclosed plans to sell 200 million shares for $1.5 billion to establish WLF’s corporate treasury.
The confusion underscores the heightened scrutiny surrounding Trump’s World Liberty Financial, which has already been accused of insider trading and market manipulation since its launch earlier this month.
Isaac’s history with ALT5 is more complex, despite his efforts to distance himself from the most recent allegations.
He admitted to having previously “taken over” JanOne Inc., ALT5’s predecessor, but resigned before its 2024 U.S. listing and rebrand.
He is currently the leader of Live Ventures. This investment firm is closely associated with ALT5 and has retained more than 1 million ALTS shares, which are valued at approximately $5.48 million.
“I am a fervent supporter and believer in ALT5 Sigma, and I am committed to ensuring the company’s success,” Isaac stated, noting that he continues to acquire shares daily.
According to corporate records, Tony Isaac, Jon’s father, serves as the current president and chairman of ALT5.
Nevertheless, an SEC filing from December disclosed that Jon Isaac executed a two-year consulting agreement with ALT5 in March 2024. This agreement involved the provision of guidance on business strategy, restructuring, client growth, and product development.
Isaac converted a $540,000 promissory note plus interest into 465,753 ALTS shares under that agreement.
Trump Administration Pushes Pro-Crypto Agenda
Last week, the Trump administration implemented policy and regulatory initiatives to further its pro-crypto agenda.
The executive order signed by President Trump urges regulators to eliminate the obstacles that obstruct the inclusion of alternative assets, such as cryptocurrencies, in 401(k) plans.
If implemented, the reforms could enable millions of Americans to allocate retirement funds to Bitcoin and other digital assets through regulated channels.
Trump also nominated Stephen Miran, an economist who advocates for digital assets, to the Federal Reserve Board of Governors, indicating that his administration’s pro-crypto stance will remain unchanged.
Trump implemented a distinct executive order to eradicate “debanking” practices that target legitimate crypto firms.
The Blockchain Association commended the measures as a “historic shift” that would decrease operational barriers for blockchain businesses, empower wealth-building, and expand consumer choice.
The SEC bolstered the positive momentum by emphasizing that specific liquid staking models, such as those that involve receipt tokens like stETH, are not securities.
SEC Chair Paul Atkins reiterated his dedication to preserving crypto innovation in the United States by promising a proactive regulatory approach and a departure from enforcement-led policymaking.