TLDR
- Senator Warren and Rep. Waters requested SEC records on Trump-backed World Liberty Financial
- Trump family controls 75% of WLFI token revenues, estimated at $390 million to date
- SEC has paused enforcement cases against crypto firms, including WLFI investor Justin Sun
- Democrats raised concerns about “unprecedented conflict of interest” with regulatory decisions
- World Liberty Financial recently launched a stablecoin as lawmakers debated stablecoin legislation
A political battle is brewing over President Donald Trump’s deep financial ties to the cryptocurrency industry. On April 2, Senator Elizabeth Warren and Representative Maxine Waters sent a letter to the Securities and Exchange Commission (SEC) demanding records about World Liberty Financial, Inc., a crypto firm with close Trump family connections.
The two Democrats, who serve as ranking members on key congressional committees, asked Acting SEC Chair Mark Uyeda to preserve and provide records dating back to October 2024. They expressed worry that the Trump family’s involvement with the firm creates a conflict of interest.
The lawmakers pointed to SEC filings showing the Trump family holds claim to 75% of token revenue from WLFI. This has already yielded an estimated $390 million payout. The family also controls 60% of future earnings from operations.
This crypto venture launched during Trump’s campaign and has expanded since his inauguration. WLFI began selling tokens through an exempt securities offering that has brought in $550 million so far.
Regulatory Shift Under New Administration
Under Acting Chair Uyeda, the SEC has changed course on crypto enforcement. The agency has paused or dropped multiple lawsuits against crypto firms. These include cases against Coinbase, Kraken, and Uniswap Labs.
In February, the SEC quietly paused its case against Tron founder Justin Sun. This move raised eyebrows since Sun later invested $75 million in WLFI. He had been charged with fraud in 2023 before becoming an advisor to World Liberty Financial.
The SEC has also created a crypto task force led by Commissioner Hester Peirce. She is known for her favorable stance toward the industry. The agency has reduced its crypto enforcement team by moving lawyers to other areas.
The White House has pushed back on conflict allegations. A spokesperson stated, “President Trump’s assets are in a trust managed by his children. There are no conflicts of interest.”
Stablecoin Legislation Sparks Debate
The controversy intensified as lawmakers debated stablecoin regulations. The House Financial Services Committee recently passed the STABLE Act with a 32-17 vote. This legislation would create a framework for dollar-denominated stablecoins.
The timing of the vote drew attention. World Liberty Financial had just announced the launch of its stablecoin, USD1, days before the committee vote. This overlap fueled concerns about potential influence on policy decisions.
During the committee meeting, Democrats proposed amendments to the bill. These would have prevented the president and top officials from launching such financial products while in office. All were rejected by the Republican majority.
Waters voiced strong objections at the hearing. “With this stablecoin bill, this committee is setting an unacceptable and dangerous precedent,” she said. She warned it would validate “the president and his insiders’ efforts to write rules of the road that will enrich themselves.”
Industry Response to Congressional Inquiry
World Liberty Financial pushed back hard against the lawmakers’ letter. A company spokesperson called it “weaponizing the power of government” to target the Trump family. They labeled the implications “completely disgusting, false, and dangerous.”
The spokesperson took direct aim at Senator Warren, calling her a “Luddite with political vendetta.” They added that such criticism “won’t stop us from building and deploying a world-class platform.”
The SEC acknowledged receipt of the congressional inquiry. A spokesperson stated that “Acting Chairman Uyeda will respond to Members of Congress directly.” The agency faces an April 14 deadline to respond to the lawmakers’ requests.
Warren and Waters want the SEC to provide details about any White House communications regarding WLFI. They also requested records about the decision to pause the case against Justin Sun. The lawmakers specifically asked if the agency had consulted with ethics officials about the Trump family’s crypto investments.
The letter asked bluntly whether “regulatory decisions are being made to benefit the President’s family financial interests.” It described the situation as an “unprecedented conflict of interest” that could affect regulatory oversight of the cryptocurrency industry.
