Democratic Lawmakers Press the SEC to Investigate President Trump's Connections to World Liberty Financial

Democratic lawmakers are pressing the Securities and Exchange Commission (SEC) for details about President Donald Trump's connections to cryptocurrency firm World Liberty

Democratic lawmakers Senator Elizabeth Warren and Representative Maxine Waters are pressing the Securities and Exchange Commission (SEC) for details about President Donald Trump’s connections to cryptocurrency firm World Liberty Financial Inc. (WLFI).

In a letter sent on April 2, the lawmakers requested records related to the crypto venture, which has reportedly netted the Trump family around $390 million. The correspondence, obtained by Benzinga via a Freedom of Information Act (FOIA) request, follows reports of the administration’s involvement in stablecoin legislation.

The letter to Acting SEC Chair Mark Uyeda, penned by Senator Warren and Representative Maxine Waters, focuses on an entity called DT Marks DEFI LLC, which is affiliated with the Trump family.

According to SEC filings, World Liberty Financial has managed to raise more than $550 million through token sales. Among the filings, one from January discloses that DT Marks DEFI holds claim to 75% of token revenue and 60% of future earnings from operations. This entity is said to be ultimately controlled by the Trump family, though the filings don't explicitly state the president's involvement.

The letter from Senator Warren and Representative Waters highlights their concern over this substantial financial interest, especially given the SEC's role in regulating the crypto industry.

"We are troubled by the fact that, at the same time, the Trump family is deeply enmeshed in a private cryptocurrency venture with substantial financial ties to a firm that appears to be subject to SEC regulation," the letter reads.

The lawmakers went on to express their belief that this "represents an unprecedented conflict of interest." They also noted reports indicating that the administration is promoting legislation to enable the use of a stablecoin, which ties into World Liberty Financial's plans to launch its own dollar-pegged token, called USD1.

The letter further mentions that the House Financial Services Committee, with a Republican majority, is considering a bill to regulate the broader adoption of crypto stablecoins.

During a committee meeting on Wednesday, Rep. Waters stated that she would not support the bill unless President Trump was blocked from owning a stablecoin business through World Liberty.

"With this stablecoin bill, this committee is setting an unacceptable and dangerous precedent, validating the president and his insiders’ efforts to write rules of the road that will enrich themselves at the expense of everyone else," said Rep. Waters.

The SEC has assembled a task force to work with the crypto industry, headed by Republican Commissioner Hester Peirce, recognized for her positive stance toward the sector. Additionally, the agency has reduced the size of its crypto enforcement team by transferring lawyers working in that group to other departments within the SEC.

Senator Warren and Representative Maxine Waters concluded their letter by requesting the SEC to clarify what procedures might be in place to "prevent the Trump family’s unprecedented financial ties to the cryptocurrency industry from influencing or guiding the SEC’s decisions."

It's worth noting that while the congressional members requested the SEC to provide the requested documents, they did not cite any legal authority that would compel the agency to comply with their request. Moreover, with a Republican majority in both the U.S. House and Senate, the potential for calling formal public hearings and conducting investigations is limited.