Warren, Reed: Loopholes in Trump-Endorsed Crypto Pose Risks for Illegal Financial Activities

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Warren, Reed: Loopholes in Trump-Endorsed Crypto Pose Risks for Illegal Financial Activities

Bitget-RWA2025/11/18 12:06

By:Bitget-RWA

- U.S. Senators Warren and Reed demand federal investigation into Trump-linked crypto firm WLF over alleged ties to North Korean hackers and Russian sanctions evasion tools. - WLF's $WLFI token sales to entities like Lazarus Group and Tornado Cash raise risks of "supercharging illicit finance" and governance manipulation by foreign adversaries. - Trump family's 22.5B $WLFI token stake valued at $3B creates conflict of interest, with officials potentially prioritizing profit over compliance during Trump adm

U.S. Senators Elizabeth Warren and Jack Reed have called for a federal probe into

World Liberty Financial

(WLF), a cryptocurrency company with strong connections to the Trump family, pointing to suspected links with criminal organizations in North Korea and Russia. In a letter addressed to Attorney General Pamela Bondi and Treasury Secretary Scott Bessent, the senators

expressed concerns about national security

regarding WLF's sale of tokens to "entities raising significant suspicion," including groups associated with North Korean hackers under sanctions and Russian tools for evading sanctions.

According to a letter obtained by CNBC, the senators referenced a September report by the nonprofit Accountable.US, which

claimed WLF distributed its $WLFI governance tokens

to organizations tied to the Lazarus Group, a hacking group backed by North Korea, as well as Tornado Cash, a platform known for laundering money. The lawmakers stated that WLF's insufficient anti-money laundering and sanctions controls could "significantly boost illegal financial activities" and allow foreign adversaries to sway the company's governance.

WLF, which names Eric Trump, Donald Trump Jr., and Barron Trump as co-founders, has issued $WLFI tokens to fund ventures such as a debit card and tokenized commodities. However, the senators pointed out that DT Marks DEFI LLC, a Trump family-linked entity, owns 22.5 billion $WLFI tokens—worth over $3 billion—and receives 75% of the revenue from token sales. They argue this situation presents a conflict of interest for Trump administration officials, who could put financial gain ahead of regulatory compliance

as indicated by the investigation

This request for an investigation comes as lawmakers consider new cryptocurrency rules that might exclude governance tokens like $WLFI from current regulatory frameworks. Warren and Reed

stressed the importance

of making sure "crypto stakeholders do not benefit at the cost of U.S. national security." WLF has yet to issue a public response.

Meanwhile, North Korea has intensified its criticism of U.S. and South Korean military collaboration,

cautioning that agreements involving nuclear-powered submarines

could set off a "nuclear domino effect" in the area. Although not directly related to the WLF investigation, these remarks highlight wider geopolitical strains that may make enforcing sanctions and crypto regulations more challenging.

World Liberty Financial has come under scrutiny from various directions, including its stablecoin

USD1

, which was used by a UAE-supported fund to invest $2 billion in Binance. The company's association with prominent individuals and its governance approach have sparked debate about openness and responsibility in a sector already facing regulatory ambiguity.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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