Key Takeaways
- Two Democratic senators asked the Justice Department and the Treasury Department to review WLFI, a crypto project operated by members of the Trump family, after reports suggested that token sales reached traders tied to North Korea and Russia.
- Accountable US traced purchases of the firm’s WLFI token to wallets with historic links to sanctioned networks, fueling concerns that foreign actors may have gained influence through the governance token.
- World Liberty Financial rejected the allegations and said it applied strict customer checks during presale rounds, insisting it turned away buyers who failed verification requirements.
- The congressional request comes as lawmakers consider new rules for digital assets, raising fears that reduced oversight of governance tokens could create openings for illicit finance and security vulnerabilities.
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Two Democratic U.S. senators are urging federal authorities to assess whether a digital asset firm tied to the family of United States President Donald Trump permitted token purchases by traders with links to North Korea and Russia.
Lawmakers Warn of Possible Security Risks
According to CNBC, Senator Elizabeth Warren of Massachusetts and Senator Jack Reed of Rhode Island told the Department of Justice and the Treasury Department in a formal letter that World Liberty Financial, a crypto venture created and largely controlled by Trump family members, may have enabled individuals connected to sanctioned or illicit networks to acquire governance tokens. The senators said such transactions could offer foreign actors a route to shape decisions inside the trump-linked company.
Their letter pointed to findings from Accountable US, a nonprofit watchdog, which reviewed transactions involving the company’s token known as WLFI.
The group said the firm had previously sold batches of the token to traders who displayed blockchain connections to a North Korean state backed hacking operation, a Russian payments channel linked to sanctions evasion, an Iranian exchange, and the mixer Tornado Cash.
Concerns Over Governance Tokens and Influence
WLFI entered public trading in September after earlier private placements, giving buyers the ability to propose and vote on changes to the protocol and placing them directly inside the company’s decision-making process.
According to a report by Accountable US, a $10000 batch of WLFI was sold in January to traders who had previously interacted with a wallet now sanctioned for its association with the Lazarus Group in North Korea.
The senators said the transaction indicated that actors hostile to the United States may have gained a pathway into the company’s governance process.
Expansion Plans Heighten Oversight Questions
World Liberty Financial is preparing to introduce new products, including a debit card and token-backed commodities.
Warren and Reed said the company’s expansion plans heighten the need for closer scrutiny, adding that the reported token sales suggest weak controls that may allow illicit funds to move more freely and give foreign actors a way into a United States based financial platform.
The senators also drew attention to the scale of the Trump family’s financial stake, noting that DT Marks DEFI, an entity tied to Donald Trump and several relatives, controls more than 22 billion WLFI tokens and receives most of the proceeds generated from token sales.
They argued that the arrangement could place stricter oversight measures in direct conflict with the family’s own economic interests, as tighter controls on token sales would reduce the income flowing to them.
Company Rejects Accusations of Compliance Failures
World Liberty Financial said the allegations are unfounded. A spokesperson told CNBC that every purchaser during the presale period underwent what the firm described as rigorous checks intended to meet the strongest industry standards for anti money laundering and customer verification. According to the spokesperson, the trump-linked company declined significant sums from buyers who did not meet those requirements.
Regulatory Debate in Washington Adds Pressure
The senators’ push comes as Congress reviews several proposals that would reshape oversight of digital assets.
Some of the measures under consideration would reduce scrutiny of governance tokens and ease reporting duties for their issuers. Warren and Reed said lawmakers must ensure that the emerging framework does not create fresh openings for illicit finance or weaken national security protections.
The senators asked the Treasury Department and the Department of Justice to outline any potential enforcement actions or ongoing reviews concerning the trump-linked company by the first of December.
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