Senate Probes World Liberty Financial Over Stablecoin USD1, Trump Ties

The political storm surrounding World Liberty Financial (WLFI) and its flagship product, stablecoin USD1, has intensified following a formal probe launched by Senate Democrat Richard Blumenthal. The investigation questions the legality and ethics of WLFI’s operations, linking them to President Trump’s crypto interests. In response, WLFI’s legal team has vehemently defended the company, labeling the probe as “fundamentally flawed” and asserting that its mission is to uphold U.S. monetary dominance rather than undermine it.

The scrutiny comes at a critical juncture as stablecoins gain increasing influence in the global financial ecosystem. WLFI’s rebuttal portrays the company as committed to building an inclusive and transparent digital financial system, firmly rooted in U.S. legal and economic frameworks. However, the political backlash, fueled by potential conflicts of interest and foreign investor exposure, suggests a challenging road ahead for the firm.

Senator Blumenthal, ranking member of the Senate Permanent Subcommittee on Investigations, issued formal letters to WLFI and Fight Fight Fight LLC, the company behind the Trump-themed memecoin. He alleged that these firms may have facilitated ethics violations and allowed foreign actors to invest in the U.S. digital asset space through backdoor deals. The letter specifically claimed that the Trump family “reaped substantial financial benefits” from WLFI, with particular concern directed at stablecoin USD1, which was used in a $2 billion investment from MGX into Binance. This transaction, according to Blumenthal, may pose national security threats by inviting foreign participation under limited oversight.

In a strongly worded letter from law firm BakerHostetler, attorneys for WLFI rejected the probe as riddled with errors and politically motivated. While stating that the firm has no legal obligation to respond, they welcomed the opportunity to correct misinformation. They emphasized that stablecoin USD1 is fully backed by U.S. Treasuries and cash equivalents, positioning it as a tool to increase global demand for U.S. debt and expand access to dollar-based financial systems. The firm noted that Trump crypto ties are not grounds for suspicion, arguing instead that WLFI is building financial products meant to serve underbanked communities worldwide. “We are committed to strengthening, not challenging, the global role of the U.S. dollar,” the letter read.

Blumenthal isn’t alone in expressing concern. House Democrat Maxine Waters raised alarms over the President’s direct involvement in launching a stablecoin, especially in the middle of ongoing legislation talks like the Genius Act. “We’ve worked for years to create a safe regulatory framework,” Waters said. “Now, we’re fast-tracking legislation without resolving key concerns that impact American consumers.” Despite the backlash, WLFI announced that a new governance proposal to airdrop stablecoin USD1 to eligible holders had passed. The firm insists it is not “operating in the shadows,” arguing instead that it is shaping a new kind of transparent and secure financial infrastructure.

Senator Blumenthal’s investigation also included Fight Fight Fight LLC, behind the Official Trump memecoin, citing questionable promotions like “Dinner with Trump.” The implication was that a small group of insiders unfairly profited from the coin’s launch. However, World Liberty Financial swiftly distanced itself, saying there’s “no affiliation” with the memecoin company or its CEO, Bill Zanker. The legal team denounced this as another factual error in the senator’s allegations. Zach Witkoff, co-founder of WLFI, took to X on Thursday evening to reaffirm the company’s stance. “We won’t be intimidated by politicians with an axe to grind,” he posted. “America, and the world, needs solutions like USD1. We’re too busy building.”

As the political debate over stablecoins and digital assets escalates, World Liberty Financial stands firm in its belief that it is shaping a future that reinforces U.S. financial power. The company’s defense of stablecoin USD1 hinges on its claim of full transparency, patriotic intent, and financial inclusion, especially for underserved global communities. Whether or not the Senate accepts these explanations remains to be seen. But what’s clear is that the intersection of digital finance and political power is no longer speculative, it’s already here.