World Liberty Financial (WLFI), the Trump family’s crypto project, is planning to release a stablecoin

The project released a memecoin immediately prior to President Donald Trump’s inauguration, the price of which skyrocketed and crashed soon after

World Liberty Financial (WLFI), the Trump family’s crypto project, is planning to release a stablecoin, raising concern over the US president’s exposure to the digital asset industry.

The project released a memecoin immediately prior to President Donald Trump’s inauguration, the price of which skyrocketed and crashed soon after, causing many to accuse WLFI of a pump-and-dump scheme.

WLFI has also made multi-million dollar purchases of crypto tokens immediately prior to important crypto-related events the president has attended or announcements influencing the industry. WLFI purchased $20 million of various tokens ahead of the March 7 White House Crypto Summit.

As World Liberty Financial’s portfolio grows and regulator oversight disappears from the crypto industry, observers and legal scholars are becoming increasingly concerned over conflicts of interest within the Trump administration.

Trump’s stablecoin USD1 riddled with liabilities

WLFI announced on March 25 that it will launch the new stablecoin USD1, “100% backed by short-term US government treasuries, US dollar deposits, and other cash equivalents.”

The coin can be used for “seamless, secure cross-border transactions,” WLFI co-founder Zach Witkoff said in the announcement.

The news of USD1’s forthcoming release came just days after WLFI secured more than $500 million through the sale of its own $WLFI tokens.

Those who follow the project closely will recall that the Trump family’s venture kicked off in January with the launch of the $TRUMP memecoin. The token was marketed with slogans like “Make America Great Again, one memecoin at a time.”

The memecoin project is a joint venture with the Trump family, who reportedly hold a 60% stake in the project. The project’s website also lists former Trump administration officials, including White House economic adviser Gary Cohn and former Treasury Secretary Steven Mnuchin, among its strategic partners.

At the time of launch, Democratic Representative Maxine Waters — a top Democrat on the House Financial Services Committee — wrote that “Anyone globally, even individuals who have been sanctioned by the U.S. or banned from our capital markets, can now trade and profit off of $TRUMP through various unregulated platforms.”

Her comments came after the project’s founders said that they were open to accepting contributions from international users.

The project’s founders also stated that they planned to donate a portion of the project’s proceeds to Trump’s 2024 presidential campaign.

However, despite the clear political implications of the project, the Biden administration has remained silent on the project, and no regulator has taken any action to shut down the project.

"This is a direct affront to constitutional safeguards meant to prevent conflicts of interest," cyber and digital media attorney Andrew Rossow told Cointelegraph. "With Trump and his family controlling 60% of World Liberty’s equity interests, the USD1 stablecoin could facilitate indirect financial gains or undue foreign influence over US policy, particularly if foreign entities invest in or use the stablecoin."

"It is also a blatant violation of the emoluments clause, which prohibits the president from accepting "any present, emolument, office, or title" from foreign powers without the consent of Congress."

Rossow added that the president’s role in a stablecoin project while at the same time working to craft stablecoin legislation in the form of the GENIUS Act is “a constitutional violation that could destabilize regulatory integrity.”

Trump’s influence over the industry and ability to drop enforcement actions against crypto executives who support him creates “an uneven playing field, disadvantaging competitors and violating principles of equal protection under the law.”

What options do regulators have regarding Trump’s crypto conflicts of interest

Trump, who has long stated an affinity with former President Andrew Jackson, seems to be holding to the latter’s strategy of acknowledging judicial rulings — and then doing what he wants regardless.

The presidential administration has already shown that it is willing to defy orders from federal judges when, earlier this month, it ignored a verbal order from a federal judge to turn around two planes full of alleged gang members bound for the Terrorism Confinement Center in El Salvador.

Regarding crypto, Senator Elizabeth Warren has already called for an ethics probe into Trump’s crypto activities. She said that the president’s memecoin “massively enriched Trump personally, enabled a mechanism for the crypto industry to funnel cash to him, and created a volatile financial asset that allows anyone in the world to financially speculate on Trump’s political fortunes.”

The probe, if it had a chance to begin with, doesn’t appear to have gone anywhere, and Congressional Republicans are busy working on the GENIUS Act, which even has the support of a handful of Democrats.

What, if anything, can be done?

Rossow said that, despite changes in SEC leadership, other agencies like the