Democratic senators are urging a probe into WLFI over alleged token sales to North Korea- and Russia-linked wallets, while researchers say some claims stem from false positives.
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World Liberty Financial, a crypto company closely tied to US President Donald Trump and his family, is facing fresh scrutiny after two Democratic Party senators urged federal regulators to investigate the firm over alleged ties to sanctioned actors in North Korea and Russia.
In a letter sent to Attorney General Pamela Bondi and Treasury Secretary Scott Bessent, Senators Elizabeth Warren and Jack Reed warned that the company’s token sales may have exposed US national security to risk, citing evidence that WLFI governance tokens were purchased by blockchain addresses linked to foreign entities, CNBC on Tuesday.
The concerns stem from a September by nonpartisan watchdog group Accountable.US, which claimed that World Liberty Financial sold tokens to traders with onchain connections to the Lazarus Group, North Korea’s state-backed hacking operation, as well as a sanctioned Russian sanctions-evasion tool, an Iranian crypto exchange and Tornado Cash.
The senators said these sales “gave adversaries a seat at the table” by granting them governance rights in the protocol. World Liberty Financial denied the allegations, telling CNBC it performed “rigorous AML/KYC checks” on all presale buyers and rejected millions of dollars from those who failed screening.
Related:
Trump family controls 75% of WLFI token revenue
WLFI’s ownership structure has added political weight to the controversy. According to its website, Eric Trump, Donald Trump Jr. and Barron Trump all serve as co-founders, while Donald Trump is listed as “Co-Founder Emeritus.” A Trump-affiliated entity, DT Marks DEFI LLC, holds 22.5 billion WLFI tokens, valued at more than $3 billion, and is entitled to 75% of revenue from token sales.
Warren and Reed argued that this raises a direct financial conflict of interest for administration officials, noting that three-quarters of all token-sale proceeds “flow directly to President Trump and his family.”
The senators also warned that the , including for a debit card and tokenized commodities, combined with alleged weak compliance controls, “risks supercharging illicit finance activity.”
World Liberty Financial has faced growing political and . Its USD1 stablecoin into Binance by UAE-backed fund MGX, shortly before the UAE secured a major chip agreement from Washington.
Cointelegraph reached out to WLFI for comment but had not received a response by the time of publication.
Related:
Expert says some allegations stem from false positives
Meanwhile, a recent analysis by blockchain researcher Nick Bax has doubts about allegations that a North Korea–linked wallet invested in WLFI. Bax reviewed the transactions cited in the watchdog report and found they were the result of false positives, not actual interactions with sanctioned entities.
According to Bax, the transactions described as “Lazarus-linked” were generated by a joke memecoin contract called Dream Cash, which automatically routes tokens from an address labeled as Lazarus Group to anyone who claims them. Bax confirmed that an independent user, @shryder1337, claimed the tokens as a joke, not as a transaction with North Korea.
“The worst part of this all (other than my Senator disseminating disinfo), is Shryder wasn’t just falsely accused of being a DPRK hacker; it appears his big bag WLFI tokens (~$95k) got frozen as a result of this false positive,” the analyst wrote.
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