WLFI Faces Congressional Scrutiny Over $500 Million UAE-Linked Investment

A $500 million investment in World Liberty Financial (WLFI) by an entity linked to the UAE royal family has triggered a congressional investigation led by Rep. Ro Khanna.

The investment, made four days before Donald Trump's second inauguration, raised concerns about potential conflicts of interest, foreign influence, and national security risks.

Lawmakers are examining whether the transaction violated federal conflict-of-interest laws or the Constitution's Emoluments Clause, and if it influenced U.S. export policy decisions regarding AI chips.

Rep. Ro Khanna, as the ranking member of the House Select Committee on China, has initiated a formal investigation into a $500 million investment in World Liberty Financial (WLFI) by Aryam Investment 1, an entity linked to UAE royal family member Sheikh Tahnoon bin Zayed Al Nahyan. The investment occurred just four days before Donald Trump's second inauguration, raising questions about timing and potential conflicts of interest. The deal granted the UAE-backed firm a 49% stake in WLFI, with approximately $187 million of the initial payment flowing to Trump-affiliated entities.

Lawmakers are seeking detailed documentation on the transaction, including payment structures, beneficial ownership, and any affiliations with the UAE government. The investigation also seeks to understand whether the investment influenced U.S. policy decisions, particularly regarding the approval of advanced AI chip exports to the UAE. The deal has drawn criticism from Democratic officials and former administration members, who describe it as potentially unprecedented and corrupt.

Did the Timing of the Investment Raise National Security Concerns?

The proximity of the transaction to Trump's re-election and the subsequent policy shifts on AI chip exports to the UAE have intensified scrutiny. The Trump administration approved export licenses allowing the UAE access to advanced AI chips, reversing earlier Biden-era restrictions. Khanna has requested records related to the transaction, expressing concerns about how the deal may have undermined the U.S. ability to outcompete China. The investigation is also exploring potential violations of the Constitution's Emoluments Clause, which prohibits public officials from receiving gifts from foreign governments.

What Are the Market Implications of the Investigation?

The investigation has already introduced volatility into the crypto market, with WLFI's governance token dropping roughly 16% in a single day before partially recovering. The Official Trump meme coin (TRUMP) has also seen significant declines, with a 24.7% loss in a week and a 95% drop since hitting an all-time high in January 2025. Analysts note that political scrutiny can amplify market risks, particularly for DeFi projects entangled with foreign capital and national security issues. The probe has also raised questions about WLFI's broader role in U.S. export control discussions and its facilitation of a $2 billion investment by Abu Dhabi-based MGX in Binance using its USD1 stablecoin. The investigation may delay broader legislative efforts, including crypto framework bills like the CLARITY Act, as lawmakers demand thorough documentation and transparency. Rep. Khanna has also called on federal prosecutors to conduct parallel investigations into the deal's potential national security implications. The probe underscores the intersection of politics, regulation, and global power in the crypto industry, with ongoing implications for both market confidence and U.S. foreign policy.