Senators Warn Trump-Linked Crypto Firm Could Pose National Security Risk

World Liberty Financial (WLFI) is facing heightened scrutiny after two Democratic Senators urged the federal regulators to investigate the company. The WLFI is a fast-growing cryptocurrency firm that is closely tied to U.S. President Donald Trump. The senators are asking for an investigation into potential links between the firm’s token sales and sanctioned foreign actors from Russia and North Korea.

Senators Cite Possible Exposure to Sanctioned Entities

In a letter to the Treasury Secretary Scott Bessent and Attorney General Pamela Bondi, Senators Jack Reed and Elizabeth Warren urged the regulators to examine whether WLFI governance tokens were purchased legally. They wanted the federal regulators to see if the tokens were purchased by malicious actors, including a sanctioned Russian sanctions-evasion tool, blockchain addresses associated with North Korea’s Lazarus Group, Tornado Cash, and an Iranian crypto exchange.

The senators referenced a report by watchdog group Accountable.US, which alleges that the WLFI presale may have allowed the above-mentioned groups to acquire governance rights. They said that “these sales gave adversaries a seat at the table,” warning about potential threats to U.S. national security.

The World Liberty Financial has denied all allegations. The company released a statement to CNBC that it conducted a comprehensive KYC and anti-money laundering screening. The company claims it denied millions of dollars to people or entities that did not meet the compliance check.

Trump Family’s Stakes in WLFI

The ownership structure is amplifying the controversy. The Trump family members, such as Donald Trump Jr., Eric Trump, and Barron Trump, are all listed as co-founders. President Trump serves as the “Co-Founder Emeritus.” DT Marks DeFi LLC, a Trump family-affiliated company, holds 22.5 billion WLFI tokens. These are valued at more than $3 billion, and the firm is entitled to 75% of revenue from the token sales.

Senators Warren and Reed have argued that this creates a direct financial conflict of interest within the Trump Administration. They also noted that the majority of funds “flow directly to President Trump and his family.”

They also warned that the company’s expansion strategies could “supercharge illicit financial activity.”

The company’s USD1 stablecoin recently featured in a $2 billion investment into Binance by UAE-backed fund MGX. The transaction occurred shortly before the UAE secured a major chip agreement from Washington.

However, blockchain analyst Nick Bax found that one of the transactions labeled as linked to North Korea’s Lazarus Group was a false positive. It was generated by a joke memcoin contract called Dream Cash. He shared proof that an independent user (shryder1337) triggered the transaction as a joke, and the user’s $95k WLFI tokens were subsequently frozen.

Bax has criticized the spread of inaccurate information and warned that mislabeling blockchain activity can lead to real-world harm for innocent users.