Senators call for investigation into Trump-linked crypto firm over security risks

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 for 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 could expose US national security, citing evidence that WLFI management tokens were purchased with blockchain addresses associated with foreign entities, CNBC reported on Tuesday.

The concerns stem from a September report Through the nonpartisan watchdog group responsible.us, it is claimed that World Liberty Financial is selling tokens to traders with Onchain connections to the Lazarus Group, the North Korean state hacking operation, as well as a sanctioned Russian Sanction-Evasion Tool, an Iranian Crypto Exchange and Tornado Cash.

The senators said these sales “gave opponents a seat at the table” by giving them management rights over the protocol. World Liberty Financial denied the allegations, telling CNBC that it conducted “rigorous AML/KYC checks” on all buyers and turned down millions of dollars from those who failed screening.

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The Trump family controls 75% of WLFI token revenue

WLFI’s ownership structure 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.” An entity related to Trump, DT Marks Defi LLC, holds 22.5 billion WLFI tokens, worth more than $3 billion, and is entitled to 75% of the revenue from token sales.

Warren and Reed argued that this raised a direct financial conflict of interest for administration officials, noting that three-quarters of all token-sales “flowed directly to President Trump and his family.”

The Senators also warned that the The company’s rapid expansionincluded plans For a debit card and tokenized commodities, combined with allegedly weak compliance controls, “the risks are supercharging illicit financial activity.”

World Liberty Financial is facing growing political and Regulatory pressure in recent months. Its USD1 stableCoin was used in a $ 2 billion investment In Binance of the UAE-backed Fund MGX, shortly before the UAE secured a major chip agreement from Washington.

Cointelegraph reached out to WLFI for comment but did not receive a response by the time of publication.

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The expert said some of the allegations stemmed from false positives

Meanwhile, a recent analysis by blockchain researcher Nick Bax has raised Doubts about allegations that North Korea invested in WLFI in WLFI. Bax analyzed the transactions noted in the watchdog’s report and found that they were the result of false positives, not actual interactions with sanctioned entities.

According to Bax, the transactions described as “Lazarus-link” were generated by a joke memecoin contract called Dream Cash, which automatically routed tokens from an address labeled as the Lazarus Group to anyone who claimed them. Bax confirmed that an independent user, @Shryder1337, claimed the tokens as a joke, not as a North Korean transaction.