Trump Family Reduces Stake in World Liberty Financial Amid Regulatory Scrutiny

One of the companies connected to US President Donald Trump and his family has reduced its stake in World Liberty Financial (WLF), a cryptocurrency platform. DT Marks DeFi LLC, an umbrella company controlled by Trump and his family, has been gradually decreasing its stake in WLF over the past 11 days. Initially holding a 75% stake as of December 2024, the company's ownership in WLF was reported to be approximately 60% as of January. This stake was further reduced to 40% sometime after June 8.

The divestment comes at a time when US lawmakers are calling for investigations into the president’s connections to the crypto industry. World Liberty Financial also began issuing its own USD1 stablecoin in March, coinciding with Congress's progress on the GENIUS Act, legislation aimed at regulating payment stablecoins in the country. The GENIUS Act passed the US Senate last week with bipartisan support but may face challenges in the House of Representatives due to Trump’s crypto ties. The president has urged the chamber to pass the bill “ASAP.”

World Liberty Financial, backed by Trump and his family, has been at the center of controversies surrounding the president's attempts to enact policies related to cryptocurrency. In May, an Abu Dhabi-based company announced its intention to use the platform’s USD1 token to settle a $2 billion investment in Binance. As of March, the company had raised roughly $550 million through two public token sales, with Trump personally reporting more than $57 million in income through the venture as of June.

The Trump family's involvement in World Liberty Financial dates back to 2016 when Donald Trump established DT Tower II LLC, which was later renamed DT Marks DEFI LLC. The family's sons, Donald Jr., Eric, and Barron, jointly acquired a 30% stake in the renamed entity. Additionally, three companies named after the sons were registered in Delaware, further solidifying the family's direct links to the crypto project.

The timing of these ownership changes coincides with heightened activity in the crypto market, particularly around World Liberty Financial's token sales and regulatory developments. In January, World Liberty Financial conducted a $200 million token sale, timed with the presidential inauguration. By March, the total token sales had reached $550 million, significantly boosting the project's visibility and market presence.

As World Liberty Financial gained traction, concerns about potential conflicts of interest arose, particularly from Democratic lawmakers. These concerns led to proposed legislation aimed at regulating political figures' involvement in crypto. The CLARITY Act, for instance, introduced stricter rules for crypto involvement by public officials, although the White House reportedly objected to language targeting Trump directly. Lawmakers are expected to revise the bill before presenting it on the House floor.

In addition to regulatory scrutiny, World Liberty Financial has seen significant growth in its stablecoin project, which is linked to the U.S. dollar. This project is backed by a $2 billion deal from a UAE-based firm, following Circle's successful public debut on the NYSE. Circle's market performance has set a benchmark for estimating World Liberty Financial's potential valuation, which could exceed $1.7 billion. Analysts estimate that selling 20% of the company could have earned Donald Trump approximately $135 million, although exact transaction details remain undisclosed.

The Trump family's decision to reduce its stake in World Liberty Financial could be seen as a strategic move to manage potential conflicts of interest and regulatory scrutiny. The family's ongoing involvement in the digital asset sector, however, remains a central part of their business ventures. As the stablecoin sector receives increased legislative attention, both regulatory shifts and internal restructuring will likely shape World Liberty Financial's future.