People walk past an advertisement feature Donald Trump with Solana, XRP, USDC Bitcoin in Hong Kong.
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Two U.S. Senators are pressing the Department of Justice and the Treasury to investigate a crypto company closely tied to the family of U.S. President Donald Trump over alleged links to illicit actors in North Korea and Russia.
In a letter on Tuesday, U.S. Senators Elizabeth Warren, D-Mass., and Jack Reed, D-R.I., minority members on the Senate Committee on Banking, Housing, and Urban Affairs, raised concerns that World Liberty Financial, a crypto firm heavily owned and run by the Trump family, may pose national security risks.
The letter — obtained exclusively by CNBC and addressed to Attorney General Pamela Bondi and Treasury Secretary Scott Bessent — argued that World Liberty Financial lacks adequate safeguards to prevent bad actors from moving funds or gaining influence over its governance.
The senators cited a September report from a 501(c)(3) nonprofit corporate watchdog called Accountable.US, which said World Liberty Financial had sold its $WLFI tokens to “various highly suspicious entities.”
Those entities included traders with ties on the blockchain to a notorious North Korean hacking organization, a sanctioned Russian “Ruble-backed sanctions evasion tool,” an Iranian crypto exchange and Tornado Cash, a known money laundering platform, the watchdog alleged.
CNBC has contacted World Liberty Financial for comment on the letter and relevant reports.
Who runs WLF?
The World Liberty Financial website lists family members Eric Trump, Donald Trump Jr., and Barron Trump as co-founders. The website shows Donald Trump as a “Co-Founder Emeritus.” An entity affiliated with the U.S. President and some of his family members also holds major equity interests in WLF.
A number of the company’s “governance token” $WLFI were released for public trading in September, after earlier private investment rounds. WLF says holders of the tokens “play a key role in helping to shape the future of the protocol,” with the ability to propose and vote on company proposals.
However, Accountable.US’ investigation called into question who those holders were. The group’s report noted that World Liberty Financial had sold $10,000 worth of its $WLFI tokens in January to traders who had a history of transacting with a wallet that is now sanctioned for association with the North Korean state-sponsored hacking team, Lazarus Group.
By selling the tokens, World Liberty Financial took money from people with “open and obvious connections to enemies of the U.S.” and raised national security risks by giving them “a seat at the table” to influence the firm’s governance, the senators alleged in their letter.
‘Risks supercharging illicit activity’
World Liberty Financial plans to continue expanding and launching new products, including a debit card and tokenized commodity assets.
The letter from the senators noted these expansions but warned that the reported token sales to bad actors “indicate an absence of robust sanctions and anti-money laundering controls,” and that “WLF risks supercharging illicit finance activity.”
It added that “the Trump family’s close ties to the company also create a financial conflict of interest for Trump Administration officials that report to the President: prioritizing token sales will directly enrich the Trump family — while compliance activities may interfere with this wealth creation.”
DT Marks DEFI LLC, “an entity affiliated with Donald J. Trump and certain of his family members,” holds 22.5 billion $WLFI tokens valued at over $3 billion and is entitled to 75% of the proceeds from $WLFI token sales, the letter noted.
“That means every time a governance token is sold, three-quarters of that money goes directly to President Trump and his family, even for sales to entities linked to North Korea and Russia,” the two senators said.
Accountable.US, in a separate report in August, estimated that roughly $11.6 billion, or 73%, of Trump’s net worth is tied to his cryptocurrency ventures, which included the launch of a $TRUMP memecoin. According to Reuters, an annual financial disclosure released by the U.S. Office of Government Ethics for the 2024 calendar year showed that Trump’s move into crypto added significantly to his wealth.
The Democratic senators added that the timing of their requests was essential as Congress considers new crypto regulation that could shield governance tokens like $WLFI from existing U.S. oversight and exempt issuers of such tokens from certain recordkeeping and disclosure requirements.
“As Congress considers legislation on the market structure for digital assets, we must ensure that crypto interests do not profit at the expense of U.S. national security and that illicit actors are not handed the keys to financial platforms that they can later exploit,” it added.
Trump, once a critic of crypto during his first term, has since embraced the industry, with his administration pushing several crypto-friendly bills, including the recently passed GENIUS Act.
Warren and Reed’s letter asked the Treasury and the Justice Department to outline information related to potential enforcement actions against World Liberty Financial by Dec. 1.
The Treasury and Department of Justice did not immediately respond to CNBC’s request for comment.
Ongoing scrutiny
Warren, a ranking member of the Senate Committee on Banking, Housing, and Urban Affairs, is a frequent critic of Trump’s embrace of the crypto industry and the crypto industry more broadly. She has previously pressed World Liberty Financial on its business dealings, including on a recent deal regarding the firm’s stablecoin.
The company’s stablecoin USD1, which is backed by dollars and short-term U.S. government treasuries, was used by the U.A.E.-backed investment fund MGX for a $2 billion investment into Binance, helping lift USD1’s traction and transaction volume.
The New York Times reported in September that the UAE had secured a massive chip deal from Washington shortly after the MGX deal closed.
Meanwhile, on Oct. 23, Trump pardoned Binance founder Changpeng Zhao, who had previously pleaded guilty to enabling money laundering while heading the cryptocurrency exchange. Trump would go on to say a few days later in a CBS “60 Minutes” interview that he knew nothing about Zhao despite granting him the pardon.
A report from the Wall Street Journal suggested that Binance not only facilitated the settlement of MGX’s investment using USD1, but also assisted in building the technology behind the stablecoin, citing anonymous sources familiar with the matter.
Binance CEO Richard Teng has denied that the company had any role in MGX’s decision to complete its investment in USD1.
Donald Trump Jr. and World Liberty Financial’s CEO Zach Witkoff, son of U.S. Special Envoy to the Middle East Steve Witkoff, told CNBC in September that concerns about conflicts of interest with the Trump administration were “complete nonsense.”
“Don and my World Liberty mission is big, but our dads’ mission is much bigger. They’re not focused on stablecoins, nor are they involved in a stablecoin business,” Witkoff said.
