People walk past an ad featuring Donald Trump and Solana, XRP and USDC Bitcoin in Hong Kong.
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Two U.S. senators are calling on the Justice Department and Treasury Department to investigate a cryptocurrency company with close ties to President Donald Trump’s family over its alleged ties to North Korean and Russian illegal actors.
Sens. Elizabeth Warren (D-Mass.) and Jack Reed (D-Mass.), minority members of the Senate Banking, Housing and Urban Affairs Committee, expressed concerns in a letter Tuesday that World Liberty Financial, a cryptocurrency company heavily owned and operated by the Trump family, could pose a national security risk.
The letter, obtained exclusively by CNBC, was addressed to Attorney General Pamela Bondi and Treasury Secretary Scott Bessent and argued that World Liberty Financial lacked adequate safeguards to prevent bad actors from moving funds or influencing its governance.
The senators cited a September report from Accountable.US, a 501(c)(3) nonprofit business watchdog, that said World Liberty Financial sold its $WLFI tokens to “a variety of highly questionable entities.”
These groups include traders associated with North Korea’s notorious blockchain hacking organization, Russia’s “Ruble-backed sanctions evasion tool,” and Iranian cryptocurrency exchange Tornado Cash, known as a money laundering platform, the watchdog claimed.
World Liberty Financial denied any wrongdoing, stating, “As a private virtual currency company with no political power, there is no conflict of interest between World Liberty Financial and the U.S. government.”
“World Liberty Financial has conducted rigorous AML/KYC checks on all pre-sale purchasers of $WLFI governance tokens, which are industry-leading, and have turned away millions of dollars in payments from potential purchasers who failed the tests,” a World Liberty Financial spokesperson told CNBC.
Generally, AML refers to anti-money laundering regulations and policies, while KYC (or Know Your Customer) refers to the steps used to verify that customers are who they say they are.
Who runs WLF?
World Liberty Financial’s website lists family members Eric Trump, Donald Trump Jr. and Barron Trump as co-founders. The website lists Donald Trump as an “honorary co-founder.” Companies associated with the President of the United States and some of his family members also hold major stakes in WLF.
Much of the company’s “governance token” $WLFI was released for public trading in September after an initial private investment round. According to WLF, token holders will be able to propose and vote on corporate proposals and will “play a key role in shaping the future of the protocol.”
But the Accountable.US investigation raised questions about who owns them. The group’s report said that in January, World Liberty Financial sold $10,000 worth of $WLFI tokens to a trader with a history of trading in wallets currently under sanctions for their association with the North Korean state-sponsored hacking team Lazarus Group.
In their letter, the senators alleged that by selling the tokens, World Liberty Financial received money from people with “open and obvious ties to enemies of the United States,” giving them a “seat at the table” to influence the company’s governance and increasing national security risks.
“Risk of escalating illegal activities”
World Liberty Financial plans to continue expanding and launching new products such as debit cards and tokenized commodity assets.
The senators’ letter notes this expansion, but warns that reported token sales to bad actors “demonstrate the absence of strong sanctions and anti-money laundering regulations” and that “WLF risks escalating illicit financial activity.”
“The company’s close ties to the Trump family also create a financial conflict of interest for Trump administration officials reporting directly to the president. Prioritizing token sales would directly enrich the Trump family, but compliance activities could impede this wealth creation.”
DT Marks DEFI LLC is an “entity affiliated with Mr. Donald J. Trump and certain members of his family,” and holds $22.5 billion in $WLFI tokens, worth more than $3 billion, and is entitled to 75% of the proceeds from the sale of $WLFI tokens, the letter said.
“This means that every time a governance token is sold, three-quarters of the funds will go directly to President Trump and his family, even if the sale is to an entity linked to North Korea or Russia,” the senators said.
In a separate report in August, Accountable.US estimated that 73% of Trump’s net worth, or about $11.6 billion, is tied to crypto ventures, including the launch of the $TRUMP meme coin. According to Reuters, the annual financial disclosure for calendar year 2024 released by the U.S. Office of Government Ethics showed that President Trump’s move to cryptocurrencies significantly increased his wealth.
The Democratic senators added that the timing of the request is important as Congress considers new cryptocurrency regulations that could shield governance tokens like $WLFI from existing U.S. oversight and exempt issuers of such tokens from certain record-keeping and disclosure requirements.
“As Congress considers legislation regarding market structure for digital assets, we must ensure that crypto interests do not profit at the expense of U.S. national security and that we do not hand over the keys to financial platforms that wrongdoers can later exploit,” he added.
Although President Trump once criticized cryptocurrencies during his first term, he has since embraced the industry, with his administration pushing for crypto-friendly legislation such as the recently passed GENIUS Act.
Warren and Reid’s letter asked the Treasury Department and Justice Department to outline information on potential enforcement actions against World Liberty Financial by Dec. 1.
The Treasury Department and Justice Department did not immediately respond to CNBC’s requests for comment.
Ongoing scrutiny
Warren, a ranking member of the Senate Banking, Housing and Urban Affairs Committee, has frequently criticized President Trump’s support for the cryptocurrency industry and the broader cryptocurrency industry. She has previously pressed World Liberty Financial on business deals, including recent deals involving the company’s stablecoins.
The company’s USD1 stablecoin, backed by dollars and short-term US government bonds, was used by UAE-backed investment fund MGX to invest $2 billion. Binancecontributing to the improvement of USD1 traction and trading volume.
The New York Times reported in September that the UAE had secured a major semiconductor deal from Washington shortly after the MGX deal was finalized.
Meanwhile, on October 23, President Trump pardoned Binance founder Chao Changpeng, who pleaded guilty to enabling money laundering while leading a cryptocurrency exchange. Days later, President Trump continued in an interview on CBS’ 60 Minutes that he knew nothing about Zhao, even though he had pardoned her.
A Wall Street Journal report, citing unnamed sources familiar with the matter, suggested that Binance not only facilitated USD1 settlement of MGX’s investments, but also helped build the technology behind the stablecoin.
Binance CEO Richard Teng denied that the company was involved in MGX’s decision to complete its investment in USD1.
Zach Witkoff, CEO of World Liberty Financial and son of Donald Trump Jr. and US Middle East envoy Steve Witkoff, told CNBC in October that concerns about a conflict of interest with the Trump administration are “complete nonsense.”
“Don and I have a world freedom mission that is big, but our fathers’ mission is even bigger. They are not focused on stablecoins and they are not involved in the stablecoin business,” Witkoff said.
