World Liberty Financial is a cryptocurrency company closely related to U.S. President Trump and his family, which has recently come under public scrutiny after two Democratic senators urged federal regulators to investigate its alleged connections with sanctioned North Korean and Russian entities.
According to a CNBC report on Tuesday, Senators Elizabeth Warren and Jack Reed warned in a letter to Attorney General Pamela Bondi and Treasury Secretary Scott Bessent that the company's token sales could pose risks to U.S. national security, citing evidence that WLFI governance tokens had been purchased with blockchain addresses linked to foreign entities.
This concern stems from a report released in September by the nonpartisan oversight organization Accountable.US. The report stated that World Liberty Financial had sold tokens to traders associated with the North Korean state-sponsored hacking group Lazarus Group, sanctioned Russian sanction evasion tools, Iranian cryptocurrency exchanges, and Tornado Cash.
The two senators stated that these sales "give adversaries a voice," as they gain governance rights over the agreements. World Liberty Financial denied the allegations and told CNBC that the company had conducted "rigorous anti-money laundering/know your customer (AML/KYC) reviews" on all presale buyers and rejected millions of dollars from those who did not pass the screening.
The ownership structure of WLFI adds a stronger political dimension to the controversy. According to its official website, Eric Trump, Donald Trump Jr., and Barron Trump are all co-founders, while Donald Trump is listed as an "honorary co-founder." An entity associated with Trump, DT Marks DEFI LLC, holds 22.5 billion WLFI tokens, valued at over $3 billion, and is entitled to 75% of the token sale proceeds.
Warren and Reed believe this directly leads to financial conflicts of interest for government officials, pointing out that three-quarters of the total token sale proceeds "flow directly to Trump and his family."
The two senators also warned that the company is rapidly expanding, including plans to launch debit cards and tokenized goods, coupled with weak compliance controls, "which could greatly facilitate illegal financial activities."
In recent months, World Liberty Financial has faced increasing political and regulatory pressure. Its USD1 stablecoin was used by the UAE-backed fund MGX to invest $2 billion in Binance, just before the UAE secured a significant chip deal from Washington.
Cointelegraph has reached out to WLFI for comment but has not received a response as of the time of publication.
Meanwhile, blockchain researcher Nick Bax recently questioned the alleged North Korean-linked wallets investing in WLFI. Bax reviewed the transactions mentioned in the oversight organization's report and found that these transactions were actually misreported and did not involve real interactions with sanctioned entities.
Bax stated that the transactions described as "Lazarus-linked" were actually generated by a joke meme coin contract called Dream Cash, which automatically transfers tokens from addresses marked as Lazarus Group to any recipient. Bax confirmed that an independent user, @shryder1337, claimed these tokens for humorous purposes, rather than engaging in real transactions with North Korea.
"The worst part is (besides my senators spreading false information), Shryder not only was incorrectly identified as a North Korean hacker, but his large WLFI holdings (approximately $95,000) also seem to have been frozen due to this misreporting," the analyst wrote.
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Original article: “Senators Warn Trump-Linked Crypto Company May Pose National Security Threat”
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