Trump family crypto assets project faces new attacks: Democrats accuse of conflicts of interest, White House policies may be affected.

According to the Financial Times, Democrats have launched fierce criticism against the Trump family's actions in the encryption sector, an event that quickly triggered a chain reaction in Washington and Wall Street. Senior Democratic lawmakers Elizabeth Warren and Maxine Waters pointed out in a joint letter earlier that the Trump family's financial holdings in World Liberty Financial (hereinafter referred to as WLFI) constitute an "unprecedented conflict of interest." They warned that this could drive the Trump administration to instruct regulatory agencies like the SEC to take positions favorable to encryption interests, thereby directly benefiting the presidential family.

The political powder keg behind the letter

As early as April 2025, these two Democratic lawmakers had sent inquiries to the SEC, asking the agency to explain whether it was subject to political interference, especially concerning WLFI, which is controlled by the Trump family. The letter emphasized that the Trump family holds 60% of the shares in WLFI, while an affiliated company enjoys a 75% profit-sharing arrangement. This structure is seen as a "clear incentive" that could lead the White House to favor its own interests in encryption regulation. For example, they pointed out that the SEC abruptly halted enforcement actions against encryption figure Justin Sun in early 2025, which was viewed as a signal of the Trump administration's pro-encryption stance.

The WLFI token plummeted 16% on its first day of trading, quickly falling from its initial price. This not only reflects market doubts about the Trump family's project but also amplifies points of attack for Democrats. Critics argue that the deregulation policies pushed by the Trump administration—such as the stablecoin regulatory bill passed by Congress—directly pave the way for projects like WLFI. Warren stated in a statement that this legislation "will make it easier for the president and his family to line their pockets." This accusation strikes at the heart of American political ethics: how can the family of an incumbent president profit in a regulated and sensitive industry without triggering conflicts of interest?

The rise and fall of the WLFI project and market feedback

WLFI, as a hallmark encryption project endorsed by the Trump family, aims to create a decentralized financial platform that promises to provide users with a "free financial" experience. However, its launch process has been fraught with controversy. In July 2025, the WLFI token was announced to be tradable, which immediately triggered backlash from the Democrats. Warren and Waters questioned in a letter whether the SEC's decision was influenced by the Trump family, particularly regarding the "sudden shift" in encryption enforcement. By September 2, the WLFI token encountered a significant setback on its first day of listing, with a price drop of 16% and sluggish trading volume. This was interpreted by the market as investors avoiding political risk—after all, a project closely associated with the White House could collapse at any time due to policy changes.

The tug-of-war between the Democratic Party and the Republican Party

The Democratic camp, led by Warren and Waters, continues to apply pressure. In April 2025, they jointly requested the SEC for transparency, questioning whether the Trump family's encryption holdings affected executive decisions. By September 2, this topic was repeatedly mentioned in the House Financial Services Committee. Waters, as a senior member of the committee, publicly criticized the court ruling that allowed Trump to shut down the Consumer Financial Protection Bureau, which was seen as an extension of encryption deregulation. In her statement, she referred to this "reckless" ruling as opening the door for the Trump family's business empire.

The Republican Party tends to adopt a defensive stance. Supporters of Trump argue that family involvement in encryption is a legitimate business activity unrelated to government policy. They point out that WLFI aims to promote financial innovation, aligning with the recovery of the U.S. economy. Some Republican lawmakers even praised Trump's "pro-encryption" position, believing it helps counter China's lead in the blockchain sector. However, this defense seems like mere window dressing to the Democrats. Warren condemned the "financial entanglements" of WLFI with the Trump administration in a Senate resolution in May, calling for a comprehensive investigation.

The profound impact on regulation and the market

The Trump family's involvement in encryption goes beyond personal controversies; it touches the core of the U.S. regulatory framework. The SEC, as the main regulatory body for encryption, has its independence questioned. Letters from Warren and Waters request the SEC to clarify whether it is subject to political interference, especially when dealing with WLFI-related enforcement. If favoritism is confirmed, it could trigger a larger scandal, potentially leading Congress to push new ethics legislation to restrict the business activities of family members of sitting officials.

For the crypto market, this event is a double-edged sword. On one hand, the Trump administration's pro-crypto policies have driven industry growth, such as the passage of the stablecoin bill aimed at injecting legitimacy into crypto. On the other hand, the political shadow has caused investors to hesitate. The first-day collapse of the WLFI token is a testament to this: despite the White House endorsement, the market still voted with its feet. Analysis shows that similar projects may face more scrutiny, particularly under the push from the Democrats, as the SEC may resume strict enforcement on crypto.

This article is for informational sharing only and does not constitute any investment advice to anyone.

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