WLFI is involved in insider dealings again? The banking license controversy under a $500 million investment

Original Title: US regulator scrutinised over bank licence sought by Trump crypto venture
Original Authors: Martin Arnold and George Steer, Financial Times
Translated by: Peggy, BlockBeats

Editor’s Note: When crypto capital intertwines with political power on the same regulatory track, controversies often penetrate deeper than the technology itself.

The controversy surrounding the Trump family's crypto venture World Liberty Financial (WLF) applying for a U.S. bank license has quickly evolved from a routine financial approval into a political issue involving conflicts of interest, foreign capital influence, and national security. A $500 million investment from a member of the Abu Dhabi royal family, potential AI chip export arrangements, stablecoin business layouts, and the president's own disclosure of tens of millions of dollars in income have made this hearing far exceed industry boundaries, becoming a pressure test for institutional boundaries and regulatory independence.

The OCC emphasized that it would "process according to procedure," while Democratic lawmakers questioned transparency and review standards. At a time when stablecoins are increasingly seeking a "bank-like" path, WLF's application is not only about a single company's compliance process but also reflects how the U.S. seeks to balance digital financial competition, geopolitical capital games, and political ethics.

The following is the original text:

On Thursday, Jonathan Gould was questioned by the Senate Banking Committee regarding the Trump family's crypto venture's application for a bank license.

A U.S. banking regulator refused to disclose specific information about the Trump family's crypto venture's application for a U.S. bank license. The venture had previously received a $500 million investment from a member of the Abu Dhabi royal family.

The head of the Office of the Comptroller of the Currency (OCC), which is responsible for issuing federal bank licenses, declined to publicly disclose the details of World Liberty Financial's (WLF) application during a Senate Banking Committee hearing on Thursday and denied that President Donald Trump had exerted any influence over the approval process.

Democratic lawmakers demanded that the OCC clarify whether WLF disclosed in its application documents that it sold a 49% stake to Sheikh Tahnoon bin Zayed Al Nahyan, the UAE's national security advisor who also controls a vast business empire.

This transaction further raised questions about whether the UAE received policy "preferential treatment" due to its investment in the Trump family-controlled enterprise, including being allowed to acquire U.S. AI chips and whether there is a risk of related technology being transferred to China.

WLF denied that the $500 million investment was related to any chip acquisition arrangements. According to the company's official website, Trump is listed as an "honorary co-founder." In its latest financial disclosure covering 2024, Trump reported personal income of $57.3 million from WLF.

Democratic progressive figure Elizabeth Warren challenged OCC head Jonathan Gould during the hearing, stating that the application poses a clear conflict of interest risk given the Trump family's stake.

WLF submitted its bank license application in early January through an entity called World Liberty Trust Company. The details of its equity transaction with the UAE, finalized just days before the president's inauguration, were disclosed by the media earlier this month.

Warren questioned Gould on whether WLF disclosed that Sheikh Tahnoon had become the "major shareholder of the proposed bank" in its application. Gould responded that he would not comment on any specific application. Warren further warned that if the license were ultimately approved, it would constitute "one of the most disgraceful corruption scandals in American history."

In response, Gould stated that the OCC would "review all applications according to established procedures" and sarcastically remarked that the "only political pressure" he felt came from Warren herself.

Democratic Senator Chris Van Hollen also pressed whether the $2 billion investment by Abu Dhabi investment firm MGX last year, which involved using WLF stablecoins to participate in the acquisition of shares in the crypto exchange Binance, would be considered in the OCC's approval process. Another Democratic member, Andrew Kim, inquired whether the OCC has enhanced review mechanisms for applications involving foreign government officials that could impact national security. Gould stated that he would respond in writing later.

WLF responded that Democrats "politicized the matter" and smeared a U.S. private enterprise undergoing strict regulatory scrutiny with "unfounded accusations." The company emphasized that World Liberty Trust Company has submitted all necessary disclosure documents as required by regulators. Currently, five companies are in line at the OCC applying for national bank licenses, with WLF being one of them; crypto firms Coinbase and Laser Digital are also among the applicants.

If approved, WLF would be able to issue and hold its USD1 stablecoin inventory independently. USD1 is a crypto token pegged 1:1 to the U.S. dollar, with related custody and issuance services currently provided by a third party. According to disclosures, WLF will not engage in lending or accepting public deposits in the future.

The proposed management team includes WLF co-founder Zach Witkoff, whose father is the current U.S. special envoy for Middle East issues and real estate billionaire Steve Witkoff, as well as Jeffrey Weiner, CEO of Integrity Automotive Holdings. The automotive dealership group led by Weiner operates in New York, New Jersey, and Connecticut.

Earlier this week, some founders' social media accounts were attacked, causing USD1 to briefly lose its peg. WLF subsequently stated that USD1 is "completely safe" and has stabilized.

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