Alt5 Sigma (NASDAQ:ALTS), which is associated with the Trump family's cryptocurrency project, has fired acting CEO Jonathan Hu and cut ties with COO Ron Pitters. The company did not give a reason, but said it had nothing to do with fraud.
Both executives declined to comment.
Alt5 Sigma leaves the leader again
Notably, this is Alt5 Sigma's second leadership change since August, when it signed a major deal with World Liberty Financial (WLFI), a cryptocurrency venture co-founded by members of the Trump family.
The agreement allows Alt5 Sigma to purchase up to $1.5 billion in WLFI digital tokens, and has fintech companies taking notice. The deal attracted attention because it could provide more than $500 million to the Trump family, who will be entitled to 75% of the WLFI token sale proceeds.
After the deal, Trump ally Zachary Witkoff became chairman of Alt5 Sigma's board. At the same time, Eric Trump and WLFI co-founder Zachary Folkman participated as non-voting observers.
The group appeared alongside Donald Trump Jr. at the Nasdaq bell-ringing ceremony to celebrate the partnership. WLFI said the filing “says it all” and that it is “excited about the future of Alt5.”
Related: Eric Trump joins ALT5 Sigma board, company raises $1.5 billion for WLFI Treasury
Legal issues surface behind the scenes
Despite the public celebrations, Alt5 Sigma was already facing unresolved legal issues overseas.
Specifically, a subsidiary of the company was found to be facing criminal charges for money laundering in Rwanda earlier this year. The company's president, Andre Beauchene, was also held responsible and ordered to be imprisoned. Both Beauchene and its subsidiary appealed, claiming they were victims of fraud.
According to SEC filings, Alt5 Sigma's board did not learn about the Rwanda incident until late August, weeks after the Trump-related token transactions were completed.
Following the revelations, Alt5 Sigma suspended CEO Peter Tassiopoulos in October without explanation. Hugh has since been appointed acting CEO, making the company the second CEO to be fired in about two months.
Alt5 Sigma appoints new acting CEO
Tony Isaac, who has been an executive at the company for many years and has been involved with Alt5 Sigma on multiple fronts, from home appliance recycling to anti-opioid measures to cryptocurrency, will be appointed acting CEO.
Frequent leadership changes highlight the instability of Alt5 Sigma, as ongoing legal and governance issues continue to emerge while Alt5 Sigma seeks to reinvent itself through WLFI token trading.
Related: Nasdaq blocks Eric Trump from Alt5 Sigma board for compliance reasons
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