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A group of five Democratic senators, led by Senator Elizabeth Warren, has expressed apprehension regarding the potential conflicts of interest associated with World Liberty Financial (WLFI), a cryptocurrency firm backed by President Donald Trump and his family. In a letter dated March 28, addressed to Federal Reserve Governor Michelle Bowman and Acting Comptroller of the Currency Rodney Hood, the senators questioned how these regulatory bodies plan to oversee WLFI and its stablecoin, USD1.
Regulatory Oversight and Legislative Context
The inquiry coincides with congressional deliberations on the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, which aims to establish a comprehensive regulatory framework for stablecoins. If enacted, the legislation would grant oversight responsibilities to the Office of the Comptroller of the Currency (OCC) and the Federal Reserve, directly impacting issuers like WLFI and its USD1 coin.
Executive Influence and Financial System Integrity
The senators highlighted concerns that President Trump’s direct involvement in a financial venture, coupled with his administration’s influence over regulatory agencies, poses “unprecedented risks to our financial system and to the integrity of decisions made by the [Federal Reserve and OCC].” They emphasized that the launch of a stablecoin closely tied to a sitting president, who stands to benefit financially from its success, presents unique challenges and potential conflicts of interest.
WLFI’s Operations and Financial Backing
Established in September 2024, prior to President Trump’s inauguration, WLFI has maintained a degree of secrecy regarding its operations. The firm’s website indicates that President Trump and his family members hold a 60% equity stake. As of mid-March, WLFI completed two public token sales, raising a total of $550 million. On March 24, the company launched its first stablecoin, USD1, on both the BNB Chain and Ethereum platforms. Additionally, Donald Trump Jr. promoted USD1 at the DC Blockchain Summit on March 26 alongside WLFI co-founders.
