"Adversaries Allegedly Granted Governance Votes in Trump-Backed Crypto Firm"

Trump-Backed World Liberty Financial Faces Scrutiny Over Alleged Ties to Sanctioned Actors

U.S. Senators Elizabeth Warren and Jack Reed have demanded a federal investigation into World Liberty Financial (WLF), a crypto firm closely tied to President Donald Trump and his family, citing alleged security risks stemming from token sales to entities linked to North Korea, Russia, and Iran. The probe, outlined in a letter, accuses WLF of failing to implement robust anti-money laundering (AML) controls, potentially enabling adversaries to influence its governance structure.

A September report by Accountable.US alleged that WLF sold its governance tokens ($WLFI) to traders with blockchain ties to the North Korean Lazarus Group, a sanctioned Russian "Ruble-backed sanctions evasion tool," an Iranian crypto exchange, and Tornado Cash, a known money laundering platform. The senators argued that these sales "gave adversaries a seat at the table," granting them voting rights over WLF's protocol. WLF has denied the allegations, stating it conducted "rigorous AML/KYC checks" and rejected millions in transactions from unvetted buyers according to Cointelegraph.

The Trump family's financial stake in WLF amplifies the controversy. DT Marks DEFI LLC, an entity affiliated with Donald Trump and his family, holds 22.5 billion $WLFI tokens valued at over $3 billion and receives 75% of proceeds from token sales. This structure creates a direct conflict of interest, the senators warned, as Trump administration officials prioritize token sales to enrich the family while compliance efforts could hinder wealth creation. WLF's expansion plans-including a debit card and tokenized commodities, they added, further heighten concerns about facilitating illicit finance.

WLF's governance model has drawn broader regulatory scrutiny. The company's whitepaper positions it as a "bank-like" entity offering crypto-based financial services, yet its leadership includes Trump family members such as Eric Trump, Donald Trump Jr., and Barron Trump, alongside CEO Zach Witkoff, son of U.S. Special Envoy to the Middle East Steve Witkoff according to CNBC. Critics argue this confluence of political and financial interests undermines transparency.

The probe comes amid a contentious regulatory landscape for crypto. President Trump has actively lobbied for federal preemption of state AI and crypto regulations, warning in a Truth Social post that "patchwork of 50 State Regulatory Regimes" risks stifling innovation. House Republicans, including Majority Leader Steve Scalise, are exploring measures to block state-level AI oversight, aligning with Trump's push for a unified federal framework according to Forbes. However, the senators' letter underscores the tension between pro-crypto policies and national security imperatives, particularly as WLF's USD1 stablecoin recently facilitated a $2 billion investment from a UAE-backed fund into Binance.

WLF has yet to respond directly to the Senate's demands but previously defended its operations. In October, Donald Trump Jr. dismissed concerns about conflicts of interest as "complete nonsense," insisting his father is "not focused on stablecoins." Meanwhile, the Treasury and Justice Department have not commented on the allegations.

As Congress debates new crypto legislation, the case highlights the risks of governance tokens escaping existing oversight. With 73% of Trump's net worth reportedly tied to crypto ventures, the senators' call for investigation signals heightened scrutiny of how political ties intersect with decentralized finance.