- US Senators Elizabeth Warren and Jack Reed have sent a letter to the US Department of Justice (DOJ) and the US Department of the Treasury asking for a federal investigation into WLFI
- The World Liberty Financial website names Eric Trump, Donald Trump Jr., and Barron Trump as the company’s co-founders, and Donald Trump himself as a “Co-Founder Emeritus”
- WLFI offers governance rights via its token, and it’s alleged that WLFI sold its digital token to buyers linked to sanctioned groups
US Senators Elizabeth Warren and Jack Reed have sent a letter to the US Department of Justice (DOJ) and the US Department of the Treasury asking for a federal investigation into WLFI, a crypto firm linked to the Donald Trump family.
Specifically, the World Liberty Financial website names Eric Trump, Donald Trump Jr., and Barron Trump as the company’s co-founders. It also lists Donald Trump himself as a “Co-Founder Emeritus.”
The National Security Risk: Selling Governance to Enemies
The letter alleges that WLFI sold its digital token to buyers linked to sanctioned groups. The beneficiaries reportedly include North Korea’s primary hacking unit Lazarus Group, Russian entities avoiding sanctions, and individuals who used services like Tornado Cash to hide their transactions.
Also, the lawmakers are raising alarms about weak internal safeguards. They point to poor systems for preventing money laundering and for screening against sanctions lists, and they worry that hostile foreign adversaries could buy tokens to gain a vote in the platform’s governance.
Related: WLFI Shows Relative Strength, Gains 50% on BTC Pair as Market Hits Extreme Fear
The issue also focuses on the Trump family’s large holding in the company. Reportedly, WLFI granted a Trump-affiliated entity 22.5 billion tokens, which are worth billions of dollars. This has led to questions about a conflict between their political power and their potential for personal profit.
At the moment, WLFI is sitting around $0.1379, nearly a 9% drop in the last 7 days.
A major red flag
It’s worth pointing out that WLFI offers governance rights via its token. That means token-holders may influence project decisions, and if such rights are acquired by foreign adversaries, they could gain influence over a project tied to a powerful political family (in this case, the Trump family). This makes it a huge red flag for regulators.
All of this can have an impact on the crypto industry as well. The value of WLFI’s token has already dropped amidst the news. Additionally, it can make investors nervous about any project that gives voting power to token holders or has links to powerful political figures.
If the government steps in and punishes WLFI, it will set a new standard. This would force all future crypto projects with similar token models to have much stronger rules to prevent money laundering and be more transparent about who holds large stakes.
Related: WLFI Token Jumps 14% as Market Links Price Pump to Trump’s Pardon of CZ
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Source: https://coinedition.com/us-senators-allege-wlfi-links-to-lazarus-group-and-russia/
