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Grifting Don - >>> Trump Family Venture Plunges Deeper Into Crypto With New ‘Stablecoin’


The Wall Street Journal

by Vicky Ge Huang

3-25-25


https://www.msn.com/en-us/money/markets/trump-family-venture-plunges-deeper-into-crypto-with-new-stablecoin/ar-AA1BCO22?cvid=8b89bc13f93e49899368c2122e0b91b3&ei=109


The Trump family’s World Liberty Financial is launching a stablecoin, its latest bid to capitalize on a crypto-market revival kindled by the president’s election.

World Liberty’s USD1 will be backed by short-term U.S. Treasurys, U.S. dollar deposits, and other cash equivalents, the company said Tuesday. The token will be issued on the Ethereum network and a blockchain created by Binance, the crypto exchange that has sought to forge closer ties to the president’s family.

Stablecoins provide the backbone to the decentralized web of digital networks that comprise the crypto markets, functioning as digital dollars used widely to store cash or pay for purchases of other tokens. They aim to maintain a 1:1 exchange ratio with government-issued currencies, and store reserves in cash or cash-like assets such as Treasurys to keep the peg in place.

World Liberty’s stablecoin project marks the Trump family’s latest push into crypto, and comes as the president’s administration has sought to make the U.S. a more-welcoming market for digital assets. Earlier this month, Trump pledged to make the U.S. the “undisputed bitcoin superpower and the crypto capital of the world.”

The Trumps launched World Liberty in October, billing the entity as a decentralized finance project that would help match crypto investors eager to borrow and lend from, and trade with, one another.

Related video: Trump Media Surges 9% In After-Hours Trading After Announcing Partnership With Crypto.com To Launch 'Made In America'-Focused ETFs.

Critics said World Liberty’s stablecoin launch poses a major conflict of interest for President Trump, who has said he hoped to see stablecoin legislation on his desk before Congress’s August recess.

“We haven’t had a president in recent memory ever sign legislation that could directly affect his financial interest,” said Kedric Payne, senior director of ethics at the Campaign Legal Center, an ethics watchdog group. “It is a clear violation of the ethics norm.”

The measure that is gaining momentum in Congress now intends to give issuers of stablecoins a regulatory framework, specifying rules on reserves and customer protections. The Trump family’s foray into stablecoins through World Liberty could derail those efforts, according to TD Cowen’s Washington Research Group analyst Jaret Seiberg. Democrats may now press for stronger investor protections and question whether the Securities and Exchange Commission could be trusted as the lead regulator on the stablecoin, Seiberg said.

DeFi users transact with each other without the usual banks and other intermediaries that dominate traditional finance, with terms written directly into the software code. And by swapping stablecoins to complete those transactions, users don’t have to worry about price volatility. The most popular stablecoin is Tether, which traders have widely used to stash their cash, invest in other tokens and swap for traditional currencies. It has also been heavily used for illicit activities, including terrorism financing and drug trafficking.

World Liberty said recently it had raised $550 million from more than 85,000 U.S. and non-U. S. investors—including its largest investor Justin Sun, the founder of Tron—by selling a token called WLFI. Earlier this year, President Trump and first lady Melania Trump also launched a pair of meme coins, a type of cryptocurrency with no intrinsic value. DT Marks DEFI, an entity affiliated with Trump and certain members of his family, owns approximately 60% of the equity interests in WLF Holdco, the parent company of World Liberty Financial.

News about the USD1 stablecoin spread on social media on Monday when Changpeng Zhao, the founder of Binance, welcomed the token to the Binance Smart Chain in a post on X. Zhao later said in another post that scammers created coins with the same name since his initial post, warning that “the official USD1 isn’t tradable yet.”

Representatives of the Trumps have held talks to take a financial stake in Binance’s U.S. arm, The Wall Street Journal reported, and Zhao has been pushing for the Trump administration to grant him a pardon.

World Liberty Financial said it is taking a conservative approach in ensuring its token maintains its stability. TerraUSD, a so-called algorithmic stablecoin, used financial engineering to maintain price stability. The token, which generated yields as high as 20%, crashed in May 2022, wiping out $40 billion and causing financial ruin for investors worldwide.

“USD1 provides what algorithmic and anonymous crypto projects cannot—access to the power of DeFi underpinned by the credibility and safeguards of the most respected names in traditional finance,” Zach Witkoff, a co-founder of World Liberty Financial, said in a statement.

Witkoff didn’t identify those respected names in the statement, and he and other company executives weren’t made available for comment.

Witkoff, the son of Trump’s ?Special Envoy to the Middle East Steve Witkoff, was among two dozen crypto executives who attended the first-ever White House Crypto Summit earlier this month.

USD1’s reserves will be safeguarded by crypto custodian BitGo and audited regularly by an unspecified third-party accounting firm, World Liberty said. BitGo’s prime brokerage business also agreed to facilitate clients’ USD1 trades.

Mike Belshe, chief executive of BitGo, said he began working with World Liberty on the stablecoin initiative late last year. He said the USD1 stablecoin will become immediately available to BitGo’s 2,500 institutional customers once his company enables the function.

“There is so much excitement about this new stablecoin that pretty much everybody wants to be a part of it,” Belshe said.

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