TLDR
- Senator Warren and Rep. Waters sent a letter to SEC demanding records on World Liberty Financial, citing $390 million in Trump family payouts
- Democrats are investigating potential conflicts of interest as Trump family controls 75% of token revenues and 60% of future earnings
- SEC has paused enforcement cases against several crypto entities, including Justin Sun who invested $75 million in WLFI
- Trump administration has pivoted to a pro-crypto stance with a new task force led by Commissioner Peirce
- World Liberty Financial recently announced plans to launch a USD-pegged stablecoin called USD1
Democratic lawmakers are pressing the Securities and Exchange Commission (SEC) for details about President Donald Trump’s connections to cryptocurrency firm World Liberty Financial Inc. (WLFI). In a letter sent on April 2, Senator Elizabeth Warren and Representative Maxine Waters requested records related to the crypto venture, which has reportedly netted the Trump family around $390 million.
The letter asks Acting SEC Chair Mark Uyeda to preserve and provide all records and communications regarding World Liberty Financial. The lawmakers expressed concerns that the Trump family’s deep financial involvement with the firm “represents an unprecedented conflict of interest.”
According to SEC filings, World Liberty Financial has raised more than $550 million through token sales. The Trump family, through an entity called DT Marks DEFI LLC, holds claim to 75% of token revenue and 60% of future earnings from operations.
Regulatory Shifts Raise Questions
Under Acting Chair Mark Uyeda, the SEC has moved away from the aggressive enforcement approach that characterized the agency during the previous administration. The SEC has paused or dropped multiple crypto lawsuits, including cases against Coinbase, Kraken, and Uniswap Labs.
In February, the SEC quietly paused its case against Tron founder Justin Sun, who has invested $75 million in World Liberty Financial. Sun had been charged with fraud in 2023 before becoming an advisor to the Trump-affiliated project.
This shift has prompted Warren and Waters to request all internal memoranda justifying these enforcement decisions. They also asked for records of meetings between SEC officials and representatives of Sun or the Trump family.
White House Responds to Allegations
A White House spokesperson defended the President against conflict of interest allegations. “President Trump’s assets are in a trust managed by his children. There are no conflicts of interest,” the spokesperson said in an emailed statement.
The Trump Organization announced in January that the president’s investments and business interests would be held in a trust. The family’s business retained an ethics adviser to “avoid any perceived conflicts of interest.”
World Liberty Financial Defends Its Position
World Liberty Financial responded strongly to the lawmakers’ inquiries. A spokesperson called the implications in the letter “completely disgusting, false, and dangerous.”
“It’s disappointing that Senator Warren is attempting to weaponize the power of the government to continue to harass and target the Trump family and our project,” the spokesperson said. They added that “Luddites with political vendettas won’t stop us from building and deploying a world-class platform.”
Stablecoin Plans Move Forward
World Liberty Financial announced on March 25 that it plans to launch a U.S. dollar-pegged stablecoin called USD1. This comes as the House Financial Services Committee, led by Republicans, is considering legislation that would regulate the broader adoption of crypto stablecoins.
The Trump White House has identified promoting stablecoin use as a legislative priority. However, during a committee meeting on Wednesday, Rep. Waters said she would not support the bill unless President Trump was blocked from owning a stablecoin business through World Liberty.
“With this stablecoin bill, this committee is setting an unacceptable and dangerous precedent, validating the president and his insiders’ efforts to write rules of the road that will enrich themselves at the expense of everyone else,” Waters said.
The SEC has created a task force to work with the crypto industry, led by Republican Commissioner Hester Peirce, who is known for her favorable stance toward the sector. The agency has also downsized its crypto enforcement team by moving lawyers working in that group elsewhere.
Senator Warren and Representative Waters have requested the SEC to clarify what procedures might be in place to “prevent the Trump family’s unprecedented financial ties to the crypto industry from influencing or guiding the SEC’s decisions.”
Republicans hold a majority in both the U.S. House and Senate, which limits the ability of Democrats to call formal public hearings and conduct investigations. The congressional members’ letter to the SEC does not cite any legal authority that would compel the agency to abide by its requests.
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