In May last year, Jonathan Lopez invested about $1 million worth of cryptocurrency in Dough Finance, a small trading platform that made it easy to make risky bets using borrowed funds.
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Initially, the 31-year-old investor and motivational speaker from Miami did well.
Part of Dough’s appeal for users was “looping,” where traders borrow against their crypto holdings to buy more of the same asset and then use that new asset as collateral to buy even more. Each “loop” increases risk and Dough made those highly technical trades as easy as a few clicks.
Lopez paid a 5% fee on the crypto he deposited in Dough, and co-founder Chase Herro personally showed him how to use the platform and cheered him along, according to documents made public in subsequent litigation between the two men.
“We get reward(s) for the risks we take,” Herro wrote Lopez. “Lfg,” he added, shorthand for “let’s fucking go.”
But on July 12, 2024, Lopez’s entire investment was gone, stolen by unidentified hackers who made off with about $2.5 million, according to a post-mortem of the heist that Dough later posted online.
“We acknowledge our mistake and are deeply sorry,” Dough said in a post-hack report published on Medium, opens new tab on July 23, 2024 conceding vulnerability in the code that made the hack possible. “We will continue to work diligently to protect our users and their assets, learning from this incident to enhance our security posture.”
Two months later, Herro and co-founder Zak Folkman resurfaced with a brand new crypto venture, World Liberty Financial, and new partners: U.S. President Donald Trump and his three sons, Don Jr., Eric, and Barron.
Herro and Folkman were introduced to President Trump and his two eldest sons by his current mideast envoy Steve Witkoff. The Trumps, Witkoff has said, were smitten by the two men’s vision of decentralized finance and became partners in World Liberty, where President Trump is listed as “Chief Crypto Advocate” and his sons are “Web3 Ambassadors.”
Now Lopez is suing Herro for fraud, misrepresentation, breach of fiduciary duties, and violating Florida’s securities laws, seeking restitution and punitive damages as well as legal fees. Lopez did not respond to requests for comment.
An attorney for Lopez, Joseph Pardo, told Reuters in February that Lopez had invested heavily in Dough based on Herro’s representations, arguments echoed in the lawsuit Lopez filed against Herro in January. Pardo did not respond to requests for additional comment.
