Trump-Backed Crypto Firm Slams Senate Inquiry Over Stablecoin and Ethics Claims

The political storm around World Liberty Financial and its flagship product, stablecoin USD1, intensified this week after Senate Democrat Richard Blumenthal launched a formal probe. The investigation questions the legality and ethics of WLFI’s operations and ties them to President Trump’s crypto interests. In response, the company’s legal team fired back, calling the probe “fundamentally flawed” and defending its mission as one designed to uphold U.S. monetary dominance, not undermine it.

The growing scrutiny comes at a time when stablecoins are becoming an increasingly influential part of the global financial ecosystem. WLFI’s rebuttal paints a picture of an organization determined to build an inclusive, transparent digital financial system, rooted firmly in U.S. legal and economic frameworks. But the political backlash, fueled by potential conflicts of interest and foreign investor exposure, may signal a long road ahead.

What Triggered the Senate Investigation?

Senator Blumenthal, ranking member of the Senate Permanent Subcommittee on Investigations, issued formal letters to World Liberty Financial and Fight Fight Fight LLC, the company behind the Trump-themed memecoin. He claimed the firms may have facilitated ethics violations and allowed foreign actors to invest in the U.S. digital asset space through backdoor deals. The letter specifically alleged that the Trump family “reaped substantial financial benefits” from WLFI, with particular concern directed at stablecoin USD1, which was used in a $2 billion investment from MGX into Binance. This transaction, according to Blumenthal, may pose national security threats by inviting foreign participation under limited oversight.

How Did WLFI Respond to the Allegations?

In a strongly worded letter from law firm BakerHostetler, attorneys for WLFI rejected the probe as riddled with errors and politically motivated. While stating that the firm has no legal obligation to respond, they welcomed the opportunity to correct misinformation. They emphasized that stablecoin USD1 is fully backed by U.S. Treasuries and cash equivalents, positioning it as a tool to increase global demand for U.S. debt and expand access to dollar-based financial systems. The firm noted that Trump crypto ties are not grounds for suspicion, arguing instead that WLFI is building financial products meant to serve underbanked communities worldwide. “We are committed to strengthening, not challenging, the global role of the U.S. dollar,” the letter read.

Is USD1 Truly a Threat or a Safeguard?

Blumenthal isn’t alone in expressing concern. House Democrat Maxine Waters raised alarms over the President’s direct involvement in launching a stablecoin, especially in the middle of ongoing legislation talks like the Genius Act. “We’ve worked for years to create a safe regulatory framework,” Waters said. “Now, we’re fast-tracking legislation without resolving key concerns that impact American consumers.” Despite the backlash, WLFI announced that a new governance proposal to airdrop stablecoin USD1 to eligible holders had passed. The firm insists it is not “operating in the shadows,” arguing instead that it is shaping a new kind of transparent and secure financial infrastructure.

What’s the Connection Between Trump’s Memecoin and WLFI?

Senator Blumenthal’s investigation also included Fight Fight Fight LLC, behind the Official Trump memecoin, citing questionable promotions like “Dinner with Trump.” The implication was that a small group of insiders unfairly profited from the coin’s launch. However, World Liberty Financial swiftly distanced itself, saying there’s “no affiliation” with the memecoin company or its CEO, Bill Zanker. The legal team denounced this as another factual error in the senator’s allegations. Zach Witkoff, co-founder of WLFI, took to X on Thursday evening to reaffirm the company’s stance. “We won’t be intimidated by politicians with an axe to grind,” he posted. “America, and the world, need solutions like USD1. We’re too busy building.”

Is WLFI Shaping the Future or Skirting Scrutiny?

As the political debate over stablecoins and digital assets escalates, World Liberty Financial stands firm in its belief that it is shaping a future that reinforces U.S. financial power. The company’s defense of stablecoin USD1 hinges on its claim of full transparency, patriotic intent, and financial inclusion, especially for underserved global communities. Whether or not the Senate accepts these explanations remains to be seen. But what’s clear is that the intersection of digital finance and political power is no longer speculative; it’s already here.