World Liberty Financial Pushes Back Against "Fundamentally Flawed" Probe by Sen. Blumenthal

Attorneys for World Liberty Financial pushed back against what they described as a “fundamentally flawed” probe by Senate Democrat Richard Blumenthal

Attorneys for World Liberty Financial (WLFI) on Thursday pushed back against what they described as a "fundamentally flawed" probe by Senate Democrat Richard Blumenthal into the USD1 stablecoin and potential conflicts of interest related to President Trump's crypto activities.

Blumenthal, the ranking member of the Senate Permanent Subcommittee on Investigations, recently sent letters to WLFI and Fight Fight Fight LLC — the company behind the Official Trump memecoin — alleging the firms may have violated federal law by enabling ethics breaches or facilitating transactions with foreign nationals who are subject to prosecution.

The senator, who has requested detailed records on ownership structures, financial relationships, and conflict-of-interest safeguards, claimed Trump financially benefited from WLFI and TRUMP, the named sponsor of the MAGA memecoin.

World Liberty Financial is backed by several members of the Trump family, including the president and his three sons, each of which have taken on ambassadorial or advocate roles for the DeFi project, according to its website.

Blumenthal also raised concerns about the scope of the TRUMP token sale, noting it was limited to U.S. residents only, while WLFI is actively seeking out foreign investors. He added that the president's son, Donald Trump Jr., is a "principal member" of Fight Fight Fight, LLC, which launched the TRUMP token.

Stablecoin concerns

In his letter to WLFI co-founder Zach Witkoff, Blumenthal claimed that the Trump family "reaped substantial financial benefits" from WLFI and had concerns about its flagship product, USD1, which was used to close Binance's record $2 billion investment from MGX.

The senator, who is known for his work on financial fraud issues, further stated that Trump's ties to WLFI create threats to national security, as the project invites foreign governments and "unscrupulous" individuals to join as investors.

However, writing on behalf of WLFI, law firm BakerHostetler said that while the company is under no legal obligation to respond, it welcomes the opportunity to address several of Blumenthal's "inaccuracies."

The DeFi project's mission is to strengthen, not undermine, the role of the U.S. dollar, the letter stated. "The company's flagship product, USD1, is a fully reserved stablecoin backed exclusively by U.S. Treasuries and cash equivalents," the lawyers wrote. "It is designed to increase global demand for U.S. government debt and expand access to dollar-denominated financial instruments at a time when adversarial regimes and emerging monetary blocs are challenging America’s monetary leadership."

The firm added that USD1 is intended to broaden access to the U.S. dollar, particularly in underserved regions, circumventing outdated banking systems and offering financial inclusion to unbanked and underbanked communities around the world.

"The goal is to create new financial technologies that can be used to improve the lives of people everywhere," they wrote.

But it seems not everyone is a fan of the idea of the former president launching his own stablecoin.

"I'm deeply concerned that the President launched his own stablecoin," top House Democrat Maxine Waters said last week amid the boycott of a planned hearing on the crypto industry following tensions over Trump's potential conflicts of interest and the Genius Act stablecoin bill.

"I negotiated with my colleagues across the aisle for the past three years to create a safe regulatory framework for stablecoins. Now, we are pushing legislation through as quickly as possible without considering some of the key issues that will impact American investors and consumers."

No affiliation with Trump memecoin firm

Blumenthal also raised concerns about Fight Fight Fight LLC, the company behind the Official Trump memecoin, which is currently being sold on major exchanges.

In his letter to Fight Fight Fight LLC CEO Bill Zanker, seen by The Block, the senator speculated that a small group of insiders profited significantly from the launch of the TRUMP memecoin, adding that he has concerns about the company's compliance with relevant securities laws.

Blumenthal also took issue with the "Dinner with Trump" promotion used to generate interest in the memecoin and claimed the company may have engaged in acts that "obstruct the administration of justice."

The senator further alleged that Fight Fight Fight LLC may have facilitated transactions with foreign nationals who are subject to prosecution in the U.S., and requested records on the company's financial relationships, ownership structures, and conflict-of-interest safeguards.

Fight Fight Fight LLC has yet to respond to the allegations.

However, World Liberty Financial's attorneys said the project has no affiliation with Fight Fight Fight, LLC, or Zanker, and the "unfounded assertion" of a "non-existent relationship" was also among the errors in Blumenthal's letter.

"The assertions in the letters concerning violations of federal law are equally baseless. WLFI is fully committed to legal compliance and has no involvement in any unlawful activity,"