Senator Elizabeth Warren and Representative Maxine Waters have raised concerns about potential conflicts of interest surrounding World Liberty Financial (WLFI), a decentralized finance (DeFi) project backed by the Trump family. In a letter to the US Securities and Exchange Commission (SEC), they requested the preservation and provision of records related to WLFI, questioning whether the Trump family’s financial ties to the project could influence SEC policy or enforcement decisions.
Reports indicate that the Trump family has assumed majority control of WLFI, with significant stakes in net token sale revenues and future business operations. This has raised questions about the independence of the SEC in regulating the crypto industry, especially as stablecoin legislation is being debated in Congress.
In a separate letter, Warren also called for transparency regarding White House “Crypto Czar” David Sacks’ profits from his crypto holdings. Questions have been raised about Sacks’ divestment of holdings before the start of the Trump administration, as well as his involvement in Bitwise’s 10 Crypto Index Fund through Craft Ventures, the venture fund he co-founded.
The lawmakers’ inquiry into potential conflicts of interest comes at a time when the SEC is undergoing structural changes under Acting Chair Mark Uyeda. While former Chair Gary Gensler took an aggressive enforcement stance toward crypto, Uyeda’s tenure has seen a shift in posture, including downsizing the agency’s crypto enforcement unit and forming a task force to improve collaboration with the industry.
The letter from Warren and Waters also raises questions about the SEC’s handling of its case against Justin Sun, a major investor in and advisor to WLFI. The regulator paused its enforcement action against Sun and his affiliated companies in February, prompting further scrutiny from lawmakers.
The Trump Organization has stated that the president’s business interests are managed by his children in a trust, with an independent attorney overseeing potential ethical concerns. However, Warren and Waters are seeking information from the SEC on internal communications regarding Trump’s involvement in crypto, records related to WLFI’s stablecoin initiative, and documents concerning the SEC’s dealings with Sun.
The SEC has not publicly responded to the lawmakers’ request, but the growing scrutiny over political entanglements in crypto regulation underscores the need for transparency and accountability in the industry. As stablecoin legislation is debated in Congress, the role of government agencies like the SEC in overseeing the crypto market will continue to be closely monitored.