Attorneys for World Liberty Financial pushed back against what they described as a “fundamentally flawed” probe by Senate Democrat Richard Blumenthal, investigating its USD1 stablecoin and potential conflicts of interest related to President Trump’s crypto activities.
Blumenthal, the ranking member of the Senate Permanent Subcommittee on Investigations, recently sent letters to World Liberty Financial and Fight Fight Fight LLC — the company behind the Official Trump memecoin — alleging the firms may have violated federal law by enabling ethics breaches or facilitating transactions with foreign nationals under prosecution. He requested detailed records on ownership structures, financial relationships, and conflict-of-interest safeguards, claiming Trump financially benefited from WLFI and TRUMP.
World Liberty Financial is backed by several members of the Trump family, including the president and his three sons, each of which have taken on ambassadorial or advocate roles for the DeFi project, according to its website.
Stablecoin concerns
The senator’s letter to World Liberty Financial, addressed to co-founder Zach Witkoff, claimed that the Trump family “reaped substantial financial benefits” from WLFI and raised concerns about its stablecoin, USD1 — used to close Binance’s record $2 billion investment from MGX. The letter further stated that Trump’s ties to WLFI created threats to national security, as the project invites foreign governments and “unscrupulous” individuals to join as investors.
Writing on behalf of World Liberty Financial on Thursday, law firm BakerHostetler said that although the company is under no legal obligation to respond, it welcomed the opportunity to address several of Blumenthal’s “inaccuracies,” without addressing them in full.
The DeFi project’s mission is to strengthen, not undermine, the role of the U.S. dollar, the letter stated. “The company’s flagship product, USD1, is a fully reserved stablecoin backed exclusively by U.S. Treasuries and cash equivalents,” the lawyers wrote. “It is designed to increase global demand for U.S. government debt and expand access to dollar-denominated financial tools at a time when adversarial regimes and emerging monetary blocs are challenging America’s monetary leadership.”
The firm added that USD1 is intended to broaden access to the U.S. dollar, particularly in underserved regions, bypassing outdated banking systems and offering financial inclusion to unbanked and underbanked communities around the world.
WLFI launched its USD1 stablecoin in March and announced on Thursday that a recent governance proposal to airdrop the stablecoin to eligible holders had officially passed. However, Sen. Blumenthal is not the only one with concerns.
“I’m deeply concerned that the President launched his own stablecoin,” top House Democrat Maxine Waters said amid a boycott of a planned hearing on the crypto industry following tensions over Trump’s potential conflicts of interest and the Genius Act stablecoin bill earlier this month. “I negotiated with my colleagues across the aisle for the past three years to create a safe regulatory framework for stablecoins. Now, we are pushing legislation through as quickly as possible without considering some of the key issues that will impact American investors and consumers.”
Not ‘operating in the shadows’
The attorneys’ letter continued that World Liberty Financial is not “operating in the shadows. ” They argue that it is building a transparent, compliant financial system rooted in U.S. trust, law, and leadership, with values like accountability and dollar dominance guiding every step.
“The company rejects the false choice between innovation and oversight. What it opposes is the misuse of regulatory authority and uncertainty to suppress lawful innovation. The future of finance must be shaped in Washington, D.C. — not in Beijing, Moscow, or behind the closed doors of legacy institutions resistant to evolve to serve the needs of customers around the world. It aims to ensure that the U.S. dollar — not a foreign alternative — remains the foundation of global commerce in the digital era. WLFI is a movement to safeguard American monetary leadership in a rapidly transforming financial landscape,” the BakerHostetler partners concluded.
In his separate letter to Fight Fight Fight LLC CEO Bill Zanker, the company behind the Official Trump memecoin, Blumenthal speculated that a small group of insiders profited significantly from its launch. He also took issue with the “Dinner with Trump” promotion. Fight Fight Fight LLC has yet to publicly respond to the allegations. World Liberty Financial’s attorneys said the project has no affiliation with Fight Fight Fight, LLC, or Zanker, and the “unfounded assertion” of a “non-existent relationship” was also among the errors in Blumenthal’s letter.
“America — and the rest of the world — needs solutions like USD1,” Witkoff posted to X late Thursday. “We will not be intimidated by politicians with an axe to grind: we’re too busy building.”
The Block reached out to Sen. Blumenthal’s office for comment.
© 2025 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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