Donald Trump and his family continue to cash in on cryptocurrency from entities looking to curry influence with the president and his administration — which is simultaneously working to deregulate the industry.
At a crypto conference in the United Arab Emirates, Eric Trump and Zach Witkoff announced that the Trump family’s stablecoin — World Liberty Financial’s USD1 — will be the vehicle for the state-backed Emirati investment firm MGX to invest $2 billion into Binance, the world’s largest crypto exchange.
The announcement comes weeks after Binance founder and former CEO Changpeng Zhao claimed he had “no discussions of a Binance US deal with … well, anyone.”
The transaction comes with a host of ethical baggage. For starters, World Liberty Financial (a decentralized exchange “inspired by Donald J. Trump”), is co-created and managed by Trump’s family — as well as that of Trump’s Middle East envoy Steve Witkoff, who has been functioning like a shadow secretary of State —and will now have direct financial ties to Binance, which in November 2023 pleaded guilty to financial crimes including money laundering, sanctions violations, and unlicensed operations. The exchange was slapped with heavy restrictions on operations within the U.S. On top of that, the transaction involves a foreign government with clear political interests in the United States. Much like Trump used his hotels as vehicles for foreign entities to court favor with the presidency, the signal being broadcast by World Liberty Financial is that the Trumps are open to investments.
While the president himself does not technically hold a position in World Liberty Financial, he is clearly involved in his family’s crypto ambitions. Days before his inauguration, Trump announced the launch of $TRUMP, a meme coin that made him billions overnight and then crashed within days. Last month, the president announced that he would be hosting an exclusive dinner for about 200 of the coin’s biggest investors at his Mar-a-Lago golf club.
According to an analysis by The Washington Post, the announcement of the dinner led to a more than 30-percent surge in the price of $TRUMP, with the largest investor dumping over $24 million into the coin. Several dozen buyers were willing to dump seven-figure sums into the coin, possibly in exchange for direct access to the president. Over at World Liberty Financial, the pattern is being repeated not just with individual investors, but nations.
According to an investigation by The New York Times, World Liberty Financial has raked in over $550 million in sales of their stablecoin and WLFI token. The Times found that in their pitches to potential investors, World Liberty Financial stressed their connections to the president.
“They kept telling us, ‘We’re like, we’re super close to Trump,’” Mike Silagadze, chief executive of the crypto startup Ether.Fi, told the Times. Dominik Schiener, the founder of a German crypto group who was also approached by World Liberty Financial, added that they found their pitch to be “very dishonest.”
Nevertheless, some took the offer. World Liberty Financial has established lucrative partnerships with crypto companies based in Hong Kong, Israel, and the United Arab Emirates, among others.
“Obviously [they] think they’re going to make money because it’s the officially endorsed Trump project,” SonicLabs Founder Andre Cronje told the Times of a pitch they rejected from the company. “It’s a black spot on our industry.”
Lawmakers in the United States are taking note. As the president takes drastic steps to deregulate crypto, it’s hard to ignore how the industry’s domestic growth will benefit him and his family directly.
Sen. Elizabeth Warren (D-Mass.) reacted to the news that World Liberty Financial would be participating in the Binance deal by writing on Thursday that “a shady fund backed by a foreign government just announced a $2 billion deal using Trump stablecoins. The Senate is gearing up to pass stablecoin legislation that will make it easier for Trump’s family to line their own pockets.”
“This is corruption. No senator should support it,” she added.
Earlier this week, Sen. Chris Murphy (D-Ct.) wrote that Trump’s connections to World Liberty Financial — as well as his other crypto ventures — was the “biggest corruption scandal in the history of the American presidency.”
“You probably don’t have to scratch very deep to find an instance where the President has received an enormous infusion of cash to his crypto coin from a CEO or foreign oligarch who is then asking for a favor from Donald Trump,” the senator told MSNBC.
“A president of the United States should not be running a back door bribery scheme — the equivalent of posting your cash app on the White House web page — then we should make it crystal clear that that’s illegal,” Murphy added. “If we were doing our job, we would pass legislation saying that no president can monetize the White House by owning a crypto coin that he uses the official channels of the White House to sell to the public, to CEOs, to Saudi princes and anybody else who has business before the United States Congress.”
