U.S. Senator calls for an investigation into Trump-associated encryption company World Liberty Financial for illegal transactions involving North Korea and Russia.

In November 2025, U.S. Senators Elizabeth Warren and Jack Reed formally wrote to the Department of Justice and the Department of the Treasury, requesting an investigation into World Liberty Financial (WLF), a cryptocurrency company deeply involved with the Trump family, for its alleged connections with illegal actors from North Korea and Russia.

A senator cited a report from the oversight organization Accountable.US, which states that WLF's governance token WLFI was purchased by wallets associated with the North Korean hacking group Lazarus, sanctioned Russian sanction evasion tools, and Iranian exchanges. This investigation comes as Congress is reviewing legislation that could restrict governance token regulation in the digital asset market, highlighting the tension between national security and encryption innovation.

National Security Risks and Regulatory Loopholes

Two Democratic senators expressed serious concerns in a letter on Tuesday about the potential national security risks posed by World Liberty Financial. As minority members of the Senate Banking, Housing, and Urban Affairs Committee, Warren and Reed pointed out that WLF lacks adequate safeguards to prevent bad actors from transferring funds or gaining influence over its governance. This allegation is based on a September report from the oversight organization Accountable.US, which details WLF's sale of its WLFI tokens to “multiple highly suspicious entities.”

According to a survey by Accountable.US, these entities include traders linked to North Korea's notorious hacking groups on the blockchain, sanctioned Russian “ruble-backed sanctions evasion tools,” Iranian encryption exchanges, and the well-known money laundering platform Tornado Cash. Senators alleged in a letter that by selling tokens, WLF was obtaining funds from “individuals with open and obvious connections to U.S. adversaries” and increasing national security risks by granting them “seats” that influence company governance. This allegation comes at a sensitive time as Congress considers legislation that may exempt such governance tokens from existing U.S. oversight.

Background and Political Connections of World Liberty Financial

The official website of World Liberty Financial shows that its co-founders include Eric Trump, Donald Trump Jr., and Barron Trump, members of the Trump family, and the website lists former President Donald Trump as an “honorary co-founder.” Entities associated with the U.S. President and some of his family members also hold significant equity interests in WLF. A large number of the company's governance tokens $WLFI were publicly issued and traded in September, following private investment rounds.

WLF claims that token holders “play a key role in helping shape the future of the protocol” and have the ability to propose and vote on company proposals. However, an investigation by Accountable.US raises questions about the identity of these holders. The organization's report notes that WLF sold $10,000 worth of WLFI tokens in January to traders with a transaction history associated with wallets sanctioned due to ties to the North Korean state-sponsored hacking group Lazarus Group. This association has raised concerns among senators that bad actors may influence company decision-making through governance rights.

World Liberty Financial key points of contention

Political connections: The Trump family is deeply involved as co-founders.

Token Sale: Selling WLFI tokens to entities associated with North Korea and Russia.

National security risks: potential financial influence on hostile forces.

Company Valuation: Entities associated with the Trump family hold 22.5 billion tokens worth over 3 billion USD.

Regulatory background: At the time when Congress is considering relaxing governance over token regulation.

World Liberty Financial Company Responds with Compliance Statement

World Liberty Financial firmly denies any wrongdoing, stating that “World Liberty Financial, as a privately-owned encryption company with zero political power, has no conflict of interest with the U.S. government.” A company spokesperson told CNBC: “World Liberty Financial conducted strict AML/KYC checks on every $WLFI governance token presale purchaser – the highest industry standards – and rejected millions of dollars from potential buyers who failed the tests.”

In general, AML refers to anti-money laundering regulations and policies, while KYC (Know Your Customer) refers to the procedures used to verify the authenticity of customer identities. The company emphasizes that its compliance standards exceed the industry average, but senators believe that despite these statements, transactions with suspicious entities still occur, indicating that existing controls may be inadequate. The company plans to continue expanding and launching new products, including debit cards and tokenized commodity assets, which further raised senators' concerns about the increased risks.

Trump Political Conflicts of Interest and Wealth Accumulation

The senator's letter specifically emphasized the financial conflicts of interest arising from the close ties between the Trump family and the company. The letter stated, “The close relationship between the Trump family and the company also creates financial conflicts of interest for Trump administration officials reporting to the president: prioritizing token sales would directly enrich the Trump family—while compliance activities could interfere with this wealth creation.”

The letter also details that the entity DT Marks DEFI LLC, associated with Donald J. Trump and certain family members, holds 22.5 billion WLFI tokens worth over $3 billion, and is entitled to 75% of the proceeds from the sale of $WLFI tokens. Two senators stated: “This means that every time governance tokens are sold, three-quarters of the funds go directly to President Trump and his family, even when sold to entities associated with North Korea and Russia.”

Accountable.US estimated in a separate report in August that 73% of Trump's net worth of approximately $11.6 billion is related to his encryption business, including the launch of the $TRUMP meme coin. According to Reuters, a financial disclosure for the 2024 calendar year released by the U.S. Office of Government Ethics shows that Trump's entry into the encryption space significantly increased his wealth.

Regulatory Background and Legislative Timing

Democratic senators added that the timing of their request is crucial as Congress is considering new encryption regulations that could protect governance tokens like WLFI from existing U.S. oversight and exempt certain record-keeping and disclosure requirements for such token issuers. The letter emphasized: “As Congress considers legislation on the market structure of digital assets, we must ensure that encryption interests do not profit at the expense of U.S. national security and that we do not hand the keys to financial platforms over to bad actors for their future use.”

This action comes against the backdrop of the Trump administration promoting several cryptocurrency-friendly bills, including the recently passed GENIUS Act. The letters from Warren and Reed request that the Treasury and Justice Departments outline information related to potential enforcement actions against World Liberty Financial by December 1. Currently, the Treasury and Justice Departments have not immediately responded to CNBC's request for comment.

Ongoing Review of Controversy Related to World Liberty Financial

As a senior member of the Senate Banking, Housing, and Urban Affairs Committee, Warren has been a frequent critic of Trump's embrace of the encryption industry and the broader encryption sector. She has previously pressured him regarding business dealings with World Liberty Financial, including recent transactions related to the company's stablecoin.

The company's stablecoin USD1 is backed by the US dollar and short-term US government bonds, and is used by the UAE-backed investment fund MGX to invest $2 billion in Binance, helping to enhance the attractiveness and trading volume of USD1. The New York Times reported in September that shortly after the MGX transaction was completed, the UAE secured a massive chip deal from Washington.

Meanwhile, on October 23, Trump pardoned Binance founder Zhao Changpeng, who had previously admitted to enabling money laundering during his leadership of the cryptocurrency exchange. Despite granting the pardon, Trump later stated in a CBS “60 Minutes” interview that he knew nothing about Zhao. A report from The Wall Street Journal suggested that Binance not only used USD1 to facilitate the settlement of MGX investments but also helped build the technology behind the stablecoin, citing anonymous sources familiar with the matter.

As senators seriously discuss the balance between national security and encryption regulation, the case of World Liberty Financial exposes the new governance challenges of the digital asset era—when token sales may involve both presidential family wealth and hostile state actors, traditional regulatory frameworks seem inadequate. This is not just an investigation into a single company, but a preview of the impending era of crypto politics: when private interests and public responsibilities intertwine on the blockchain, do we need a whole new rulebook?

FAQ

What are the main allegations that Senators are calling for an investigation into World Liberty Financial?

It is alleged that the company sold governance tokens to wallets associated with the North Korean hacker group Lazarus, sanctioned Russian entities, and Iranian trading venues, which may pose a national security risk, and that the Trump family directly profited from it.

What is the connection between World Liberty Financial and Trump family?

Members of the Trump family, including Eric Trump, Donald Trump Jr., and Barron Trump, are listed as co-founders of the company, while former President Trump is the “honorary co-founder.” Family-affiliated entities hold tokens worth over $3 billion and receive 75% of the sales revenue.

How does the company respond to these allegations?

WLF denies any wrongdoing, stating that it conducted “industry-leading standard” AML/KYC checks, rejected buyers who failed the tests, and emphasized that as a private company, it has no conflicts of interest with the U.S. government.

What is the significance of the special timing requested by this survey?

As Congress reviews the digital asset legislation that may exempt governance tokens from existing regulations, senators are concerned that the legislation could allow such national security risks to evade regulation and are calling for an investigation to be completed beforehand.

What is the relationship between this event and the encryption policy of the Trump administration?

Trump has shifted from a critic of encryption to a supporter of the industry, promoting friendly policies such as the GENIUS Act, while pardoning the founder of Binance, and his family profits from crypto businesses, raising concerns about conflicts of interest.