On April 2, Senator Elizabeth Warren and Representative Maxine Waters reached out to the US Securities and Exchange Commission (SEC), urging them to maintain and provide records connected to World Liberty Financial (WLFI), a decentralized finance initiative supported by the family of former President Donald Trump.
A report indicated that in their correspondence with acting SEC Chairman Mark Uyeda, the lawmakers raised concerns about potential conflicts of interest due to the Trump family’s involvement in the enterprise. The letter also requested clarification on whether the financial connections of the Trump family to World Liberty Financial could affect SEC policies or enforcement actions.
### WLFI Under Investigation
This action comes in light of reports indicating that Trump’s family has gained majority control over WLFI, claiming 75% of the net revenue from token sales and 60% of future business operations, which could yield approximately $400 million in fees for them.
While the letter does not possess legal power to compel the SEC to act, it reflects a rising apprehension regarding political influences on cryptocurrency regulation, especially amidst ongoing legislative discussions on stablecoins.
Warren previously issued a letter on March 6, advocating for transparency regarding the profits accrued by the White House’s “Crypto Czar,” David Sacks, from his cryptocurrency holdings. This letter followed Sacks’ statement on March 2, where he disclosed that he had divested all his assets, including Bitcoin (BTC), Ethereum (ETH), and Solana (SOL), prior to the commencement of Trump’s presidency.
The correspondence also scrutinized Sacks’ profits concerning his exit from the Bitwise 10 Crypto Index Fund, to which he had exposure through Craft Ventures, a venture fund he co-founded.
### Lawmakers Question the SEC’s Autonomy
This inquiry aligns with a session of the House Financial Services Committee discussing the regulation of stablecoin issuance and usage on April 2. The Trump administration has signaled that regulation and integration of stablecoins are key policy priorities. During this session, Waters indicated her opposition to the current bill unless it includes measures to prevent Trump or his associates from owning a stablecoin issuer, stating:
> “With this stablecoin bill, this committee is setting an unacceptable and dangerous precedent, validating the president and his insiders’ efforts to write rules of the road that will enrich themselves at the expense of everyone else.”
On March 25, World Liberty Financial announced plans to launch USD1, a stablecoin pegged to the US dollar.
In their letter, Warren and Waters requested that the SEC retain communications from the Trump White House and provide records involving over six members of the Trump family and their business partners. They also sought information on what checks, if any, exist to prevent conflicts of interest from affecting SEC actions, given what they termed “unprecedented financial ties to the crypto industry.”
### Additional Questions on Enforcement
The inquiry further emphasizes recent structural changes within the SEC. Under former chair Gary Gensler, the Commission adopted a more aggressive approach toward cryptocurrency enforcement. However, Uyeda’s tenure has marked a transition toward a softened stance, including downsizing the agency’s crypto enforcement unit and establishing a task force aimed at enhancing collaboration with the industry, led by Commissioner Hester Peirce, known in the community as “Crypto Mom” for her supportive views on cryptocurrency.
The lawmakers expressed concerns regarding the SEC’s management of its recent case against Justin Sun, a significant investor and advisor to World Liberty Financial. The SEC had paused its enforcement action against Sun and his affiliates on February 27.
In January, the Trump Organization announced that the president’s business interests would be transferred into a trust managed by his children, with an independent lawyer overseeing any ethical issues. A White House spokesperson reiterated that “President Trump’s assets are in a trust managed by his children. There are no conflicts of interest.”
Warren and Waters’ letter requests nine categories of information, including any internal communications about Trump’s involvement in the crypto space, records related to World Liberty Financial’s USD1 stablecoin project, and documents pertaining to the SEC’s interactions with Justin Sun.
Currently, the SEC has not publicly responded to the lawmakers’ inquiry.