Last summer, a money-losing digital-payments firm with a history of legal troubles seized what its leaders thought was a big opportunity: a deal with the Trump family’s crypto platform.

ALT5 Sigma Corp., a blockchain firm with fewer than two dozen employees, suddenly pivoted to buying virtual tokens issued by World Liberty Financial. World Liberty – originally founded by President Donald Trump, Middle East envoy Steve Witkoff and their sons – was taking a stake in ALT5 and appointing Zach Witkoff its new chairman. To buy World Liberty tokens, the company raised $750 million from heavyweights including hedge funds Point72 Asset Management and ExodusPoint Capital Management.

The WLFI transaction came…