Changing auditors three times within 6 weeks, Alt5 Sigma's financial report delays spark delisting crisis

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Author: Zhao Ying

Source: Wall Street Insights

“Trump Coin Circle Assets” Alt5 Sigma is facing financial reporting chaos and potential delisting risks, having replaced three audit firms within six weeks, with company executives also resigning consecutively.

On Tuesday, according to the Financial Times of the UK, the audit firm Victor Mokuolu CPA PLLC hired earlier this month by Trump family-related cryptocurrency company Alt5 Sigma had its license expire in August. After the Financial Times inquired about this issue, Alt5 Sigma fired the audit firm on Christmas Day and appointed LJ Soldinger Associates as its third audit firm.

This Las Vegas-based company reached an agreement in August with Trump family’s World Liberty Financial, agreeing to purchase and hold a large amount of $WLFI tokens, with Eric Trump (Eric Trump) subsequently joining the board as an observer. However, since the announcement of the deal, the company has failed to release quarterly financial reports on time and faces Nasdaq delisting threats.

The chaos at Alt5 Sigma is not only reflected in the frequent change of auditors; company executives have also recently resigned in succession, including CFO Jonathan Hugh, who left three months after joining during the Trump deal, and CEO Peter Tassiopoulos, who stepped down in October.

Audit License Expiry Triggers Chain of Issues

The dismissed audit firm Victor Mokuolu CPA PLLC’s license in Texas expired in August. According to state regulations, the firm was prohibited from conducting audits before renewing its license. Although founder Victor Mokuolu updated his personal CPA license on August 31, as of December 26, the firm’s license had not yet been renewed by the Texas State Board of Public Accountancy (TSBPA).

This audit firm had previously been penalized for multiple failures to submit regulatory filings on time. The Public Company Accounting Oversight Board (PCAOB) fined it $30,000 in 2023 for failing to report the completion of audits for six listed companies within the required 35 days. Texas regulators also imposed a $15,000 fine last year for the same violations.

In the 2023 peer review of the accounting industry, the firm received a failing grade and has been working for over two years to correct related deficiencies. According to recent regulatory filings, the firm lists 30 small-cap audit clients.

Turbulent Period After Trump Deal

During the period when Alt5 Sigma appointed and then dismissed Victor Mokuolu CPA PLLC on December 8, the company was in a state of intense upheaval. The company currently defines itself as “a fintech company with pioneering $WLFI digital asset portfolio strategies.”

The Trump deal in August promised that the company would purchase and hold a large amount of WLFI tokens from World Liberty Financial, and Trump’s cryptocurrency project also became an investor in Alt5 Sigma. As of December 8, Alt5 Sigma held approximately 7.3 billion WLFI tokens, worth about $1.1 billion, making Trump’s crypto project an investor as well.

Since the Trump deal, Zack Witkoff, co-founder of World Liberty Financial and son of Trump peace negotiator Steve Witkoff, has served as chairman of Alt5 Sigma.

Senior management has seen significant changes in recent months. CFO Jonathan Hugh, who joined during the Trump deal, resigned after three months, and CEO Peter Tassiopoulos left in October. Board member David Danziger resigned last month, causing the company to violate requirements regarding the size of the audit committee and accounting expertise.

Financial Reporting Delays and Delisting Threats

Alt5 Sigma faces Nasdaq delisting threats due to its failure to submit the quarterly report for the period ending September on time. The company attributed part of the delay to the “timeliness and responsiveness” of its former auditor, who officially resigned in November.

Alt5 Sigma was restructured in July 2024 by biotech company JanOne, which previously focused on developing “innovative solutions to end the opioid epidemic.” JanOne merged with Alt5 Sigma and renamed itself in the same month. JanOne had previously renamed in September 2019; before that, the company was called Appliance Recycling Centers of America ( American Appliance Recycling Centers ).

Alt5 Sigma states that it provides financial infrastructure enabling traditional financial institutions to integrate with the digital asset economy.

In August this year, Alt5 Sigma disclosed to US regulators that its Canadian subsidiary and former head of the group were found guilty in May by Rwandan courts of crimes including “illegal enrichment and money laundering.” Alt5 Sigma Canada and Andre Beauchesne filed an appeal with the High Court of Kigali, Rwanda, in June, and the case is still under judicial review. Both Alt5 Sigma Canada and Beauchesne deny any misconduct and insist they are victims of fraud.