In a significant turn of events, two U.S. senators have urged the Department of Justice (DOJ) and the Treasury Department to investigate World Liberty Financial (WLFI), a Trump-backed cryptocurrency venture, over allegations of token sales involving illicit entities.
On November 18, Democratic Senators Elizabeth Warren and Jack Reed raised alarm over potential national security threats related to WLFI’s operations. They articulated their concerns in a letter that called for scrutiny from Attorney General Pam Bondi and Treasury Secretary Scott Bessent regarding claims that the firm had engaged in sales to individuals and entities under sanctions, particularly those linked to Russia and North Korea.
The senators highlighted that WLFI allegedly lacks adequate safeguards to prevent unseemly actors from influencing its governance and financial operations. They contended that this situation represents a significant conflict of interest and raises broader concerns about national security.
According to prior reports, WLFI sold its governance token to various dubious parties, including traders connected to North Korea’s infamous Lazarus Group, as well as users of Russia’s ruble-backed A7A5 stablecoin and Iran’s prominent crypto platform, Nobitex. Warren and Reed described these transactions as alarming, suggesting an absence of stringent sanctions and anti-money laundering measures within WLFI’s framework.
Furthermore, the senators articulated that such engagement could facilitate illicit financial activities and allow harmful influences to permeate the company’s governance, raising potential risks for U.S. national security.
In their communication, they underscored a deep financial conflict of interest stemming from the Trump family’s involvement in WLFI. They argued that such entanglements could compromise the integrity of regulatory efforts, positing that prioritizing lucrative token sales could lead to conflicts with compliance measures necessary to curb potential abuse.
In response to the senators’ allegations, a spokesperson for World Liberty Financial outright dismissed claims of any wrongdoing, asserting that the company is a private entity with no political sway. The representative claimed that WLFI has upheld rigorous anti-money laundering (AML) and know-your-customer (KYC) procedures, highlighting that they refused approximately $7 million from potential buyers who did not meet necessary standards.
Democratic lawmakers have sought clarifications from several key government officials regarding the implications of Trump’s cryptocurrency ventures, including inquiries about a recent pardon granted to Changpeng “CZ” Zhao, co-founder of Binance. While President Trump has denied these allegations of impropriety, the scrutiny continues.
As Congress gears up to discuss new regulations governing digital assets, Senators Warren and Reed emphasized the urgency of their request. They are advocating for robust oversight mechanisms to ensure that illicit actors do not exploit financial platforms, particularly emphasizing the need for measures that would protect national security interests while navigating the evolving landscape of cryptocurrency legislation.
The senators have requested relevant information from the DOJ and Treasury by December 1, marking a critical deadline in what may become a major investigation into the intersection of cryptocurrency and national security.
