Democratic Senators Elizabeth Warren and Jack Reed have requested that the Department of Justice (DOJ) and the U.S. Treasury probe the Trump-linked World Liberty Financial (WLFI) over alleged links to illicit actors. The senators also cited a report that alleged the crypto firm sold its WLFI token to suspicious entities.
Democrats Request DOJ To Investigate Trump-Linked WLFI
According to a CNBC report, the two Democratic Senators sent a letter to Attorney General Pam Bondi and Treasury Secretary Scott Bessent asking for an investigation into the crypto company over alleged links to illicit actors in North Korea and Russia. They also raised concerns in the latter that the firm, which has ties to the Trump family, may pose national security risks.
Warren and Reed further argued that WLFI lacks adequate safeguards to prevent bad actors from moving funds or gaining influence over its governance. The Senators alluded to a report from Accountable.US, which alleged that the crypto firm had sold its native token to a “variety of highly suspicious entities with connections to North Korea, Iran, and a known money laundering platform, Tornado Cash.”
The nonprofit corporate watchdog had further claimed that the Trump family crypto venture sold 600,000 of its WLFI tokens to a Lazarus Group-tied crypto trader “Shryder.eth.” The organization noted that the trader’s wallets look to have now been sanctioned by the Treasury Department’s Office of Foreign Asset Control
(OFAC) for its ties to the North Korean state-sponsored hacking team.
Meanwhile, this request from the Democratic senators marks the latest bid to probe the president’s involvement in crypto, following past allegations of corruption. CoinGape had reported how the Trump family’s crypto fortune exploded by $1 billion, thanks in part to the $550 million from just WLFI governance token sales.
Senators Issue Warning Over Lack Of AML Controls And Trump’s Ties
While noting WLFI’s expansion plans to launch a retail app and a debit card, the senators warned that the reported token sales indicate a lack of robust sanctions and anti-money laundering controls. In line with this, they declared that the crypto firm risks “supercharging illicit finance activity.
Warren and Reed also stated that the Trump family’s close ties to the crypto firm create a financial conflict of interest for the Trump administration officials who report to the president. They claimed that this conflict of interest stems from prioritizing token sales, which will directly enrich the Trump family, while compliance activities may interfere with this wealth creation.
They noted that DT Marks DEFI LLC, an entity they claim has ties to Trump and some of his family members, holds 22.5 billion WLFI tokens and is entitled to 75% of the proceeds from the token sale. As such, the senators said that three-quarters of that money goes to Trump and his family, even for sales to entities linked to North Korea and Russia.
The Crypto Legislation Angle
Warren and Reed also mentioned that the timing of their requests was essential, as Congress is considering crypto regulations that could prevent governance tokens like WLFI from falling under U.S. oversight and exempt token issuers from certain recordkeeping and disclosure requirements.
They declared that they must ensure that crypto interests do not profit at the expense of U.S. national security and avoid handing the keys to financial platforms to illicit actors, who can later exploit them.
Notably, the Senator is currently working on the crypto market structure bill with a markup likely to take place next month. However, there are still concerns over bipartisan support, with Democrats still alluding to the president’s involvement in crypto.
Warren and Reed have asked the DOJ and the U.S. Treasury to outline information on potential enforcement actions against WLFI by December 1.
Source: https://coingape.com/democrats-demand-probe-into-trump-linked-wlfi-over-token-sales-to-illicit-actors/
