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A cryptocurrency project spearheaded by U.S. President Donald Trump is facing severe backlash, including a sharp drop in its token price, amid controversy over potential national security threats stemming from a major ownership stake held by the United Arab Emirates (UAE).
According to crypto media outlet CoinGape on February 16 (local time), Treasury Secretary nominee Scott Bessent has recently come under strong pressure from senators to closely examine the ownership structure of World Liberty Financial (WLFI). Reports that a UAE entity holds a 49% stake in the project, which is linked to President Donald Trump, have sparked political concerns over conflicts of interest and national security risks.
The probe was brought into the spotlight through an official letter sent to Bessent by Senator Elizabeth Warren and Senator Andy Kim. In the letter, the senators urged the Committee on Foreign Investment in the United States (CFIUS) to conduct an objective review of the stake acquisition. They warned that foreign entities could potentially gain access to sensitive personal information collected through the project, posing a serious threat to U.S. national security. They also called for an investigation into any potential ties with G42, a technology firm reportedly linked to the Chinese military.
As political and regulatory risks surfaced, the price of World Liberty Financial fell by about 8% in just one day, reflecting growing investor anxiety. Concerns that the UAE’s substantial influence could improperly affect future U.S. financial policy decisions intensified selling pressure, especially given that the project was established in November 2024, two months before the presidential election and prior to Trump’s inauguration. Investors believe that whether the government initiates a formal investigation will be a key factor determining the project’s long-term viability.
Despite the controversy, World Liberty Financial is attempting to push forward with business expansion. The project recently announced plans to launch a new foreign exchange trading platform called World Swap and has applied to the Office of the Comptroller of the Currency (OCC) for approval to establish a national trust bank, accelerating its efforts to enter the regulated financial sector. However, with mounting pressure from the Senate Banking Committee, the bank charter approval process is expected to face significant hurdles.
The financial risks surrounding President Trump underscore the vulnerability of politically themed assets within the cryptocurrency market. Unless uncertainties surrounding governance and allegations of foreign capital involvement are resolved, price volatility is likely to intensify. Whether Bessent proceeds with a rigorous investigation as requested by lawmakers is expected to have a significant impact not only on the project’s future but also on the broader landscape of cryptocurrency regulation.
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