Journalist
Hassan Shittu
Journalist
Hassan Shittu
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World Liberty Financial (WLFI), the issuer of the USD1 stablecoin, publicly rejected a Senate probe into its operations, dismissing the inquiry as politically motivated and lacking substance.
The public response came shortly after Senator Richard Blumenthal (D-CT), ranking member of the Senate Permanent Subcommittee on Investigations (PSI), revealed that his office launched a preliminary inquiry into WLFI’s political connections and foreign investment sources on May 6.
The senator raised alarms over the stablecoin project’s governance, national security implications, and potential financial entanglements, particularly its ties to President Donald Trump.
In a formal letter, Blumenthal requested extensive documentation from both WLFI and Fight Fight Fight LLC, the company behind the Official Trump meme coin (TRUMP).
The letter alleges that these entities may have violated federal ethics laws by facilitating financial transactions involving foreign nationals facing prosecution or by creating potential conflicts of interest involving Trump.
It further accuses WLFI and TRUMP of providing substantial financial benefits to Trump and his associates.
The probe follows a broader call from Senators Elizabeth Warren and Jeff Merkley, who earlier demanded an ethics investigation into what they termed a “staggering conflict of interest” involving WLFI, USD1, and a reported $2 billion foreign investment routed through Binance.
Inside the USD1 Stablecoin: Claims of Transparency and Financial Inclusion
In a letter issued through the law firm BakerHostetler, WLFI rejected the allegations and reaffirmed its commitment to financial transparency and U.S.-based compliance.
“World Liberty Financial is not operating in the shadows,” the attorneys wrote. “It is building a transparent, compliant financial system rooted in U.S. trust, law, and leadership, with values like accountability and dollar dominance guiding every step.”
The firm emphasized that its flagship product, USD1, is a fully reserved, dollar-backed stablecoin collateralized by short-term U.S. Treasuries and cash equivalents.
WLFI insists that its mission is to increase global demand for U.S. debt instruments and expand dollar access to underserved regions worldwide.
“The company rejects the false choice between innovation and oversight,” the letter continued. “What it opposes is the misuse of regulatory authority and uncertainty to suppress lawful innovation. The future of finance must be shaped in Washington, D.C.—not in Beijing, Moscow, or behind the closed doors of legacy institutions resistant to evolving to serve the needs of customers around the world.”
BakerHostetler’s attorneys concluded by framing WLFI as part of a broader movement to preserve American monetary leadership in the digital era.
Blumenthal also sent a separate letter to Bill Zanker, CEO of Fight Fight Fight LLC, questioning the company’s conduct in launching the Trump meme coin and raising concerns about a “Dinner with Trump” promotion.
The senator speculated that a small group of insiders may have profited greatly from the project. As of now, Fight Fight Fight LLC has not responded publicly to the allegations.
In response, WLFI’s attorneys categorically denied any affiliation with Fight Fight Fight LLC or Zanker. “The unfounded assertion of a non-existent relationship” was among the factual errors in Blumenthal’s letter, they stated.
Political Crypto, Foreign Investors, and Regulatory Crossroads
The WLFI probe indicates the growing tension between politics and digital assets as high-profile figures deepen their involvement in crypto.
President Donald Trump himself has previously promoted digital asset initiatives, including the controversial $TRUMP meme coin, while simultaneously criticizing central bank digital currencies (CBDCs).
Adding to the complexity, WLFI has received substantial backing from foreign investors. Chinese entrepreneur Justin Sun reportedly committed $30 million to the project and serves as an adviser to the firm.
The firm is also linked to capital sources in Abu Dhabi. These connections have sparked concerns about potential foreign influence over a U.S.-based financial instrument.
Earlier this month, House Democrats launched a parallel investigation into Trump’s deepening involvement in the crypto sector.
In a letter dated May 14, Representatives Gerald Connolly, Joseph Morelle, and Jamie Raskin called on Treasury Secretary Scott Bessent to release all suspicious activity reports (SARs) filed since 2023 concerning Trump-connected entities, including WLFI and the Official Trump token.
In response to the growing concerns, Senate Democrats introduced the Modern Emoluments and Malfeasance Enforcement (MEME) Act on May 6.
Proposed by Senator Chris Murphy, the bill seeks to prevent federal officials, including the president, vice president, members of Congress, and their families, from creating, promoting, or financially benefiting from digital asset projects, including cryptocurrencies, securities, and tokenized commodities.
