World Liberty Monetary, a crypto firm intently tied to US President Donald Trump and his household, is dealing with recent scrutiny after two Democratic Occasion senators urged federal regulators to research the agency over alleged ties to sanctioned actors in North Korea and Russia.
In a letter despatched to Lawyer Basic Pamela Bondi and Treasury Secretary Scott Bessent, Senators Elizabeth Warren and Jack Reed warned that the corporate’s token gross sales might have uncovered US nationwide safety to threat, citing proof that WLFI governance tokens had been bought by blockchain addresses linked to overseas entities, CNBC reported on Tuesday.
The issues stem from a September report by nonpartisan watchdog group Accountable.US, which claimed that World Liberty Monetary bought tokens to merchants with onchain connections to the Lazarus Group, North Korea’s state-backed hacking operation, in addition to a sanctioned Russian sanctions-evasion device, an Iranian crypto change and Twister Money.
The senators stated these gross sales “gave adversaries a seat on the desk” by granting them governance rights within the protocol. World Liberty Monetary denied the allegations, telling CNBC it carried out “rigorous AML/KYC checks” on all presale consumers and rejected hundreds of thousands of {dollars} from those that failed screening.
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Trump household controls 75% of WLFI token income
WLFI’s possession construction has added political weight to the controversy. In accordance with its web site, Eric Trump, Donald Trump Jr. and Barron Trump all function co-founders, whereas Donald Trump is listed as “Co-Founder Emeritus.” A Trump-affiliated entity, DT Marks DEFI LLC, holds 22.5 billion WLFI tokens, valued at greater than $3 billion, and is entitled to 75% of income from token gross sales.
Warren and Reed argued that this raises a direct monetary battle of curiosity for administration officers, noting that three-quarters of all token-sale proceeds “circulate on to President Trump and his household.”
The senators additionally warned that the company’s rapid expansion, together with plans for a debit card and tokenized commodities, mixed with alleged weak compliance controls, “dangers supercharging illicit finance exercise.”
World Liberty Monetary has confronted rising political and regulatory pressure in recent months. Its USD1 stablecoin was used in a $2 billion investment into Binance by UAE-backed fund MGX, shortly earlier than the UAE secured a significant chip settlement from Washington.
Cointelegraph reached out to WLFI for remark however had not acquired a response by the point of publication.
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Knowledgeable says some allegations stem from false positives
In the meantime, a latest evaluation by blockchain researcher Nick Bax has raised doubts about allegations {that a} North Korea–linked pockets invested in WLFI. Bax reviewed the transactions cited within the watchdog report and located they had been the results of false positives, not precise interactions with sanctioned entities.
In accordance with Bax, the transactions described as “Lazarus-linked” had been generated by a joke memecoin contract known as Dream Money, which robotically routes tokens from an tackle labeled as Lazarus Group to anybody who claims them. Bax confirmed that an impartial person, @shryder1337, claimed the tokens as a joke, not as a transaction with North Korea.
“The worst a part of this all (apart from my Senator disseminating disinfo), is Shryder wasn’t simply falsely accused of being a DPRK hacker; it seems his huge bag WLFI tokens (~$95k) bought frozen because of this false optimistic,” the analyst wrote.
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